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Farmland values soften in Chicago Fed 7th District

Chicago Federal Reserve economist David Oppedahl says farmland values in the Seventh District softened during the third quarter.

“The farmland values are pretty stable overall, but they’re down about a percentage point from a year ago. Up about a percentage point from a quarter ago.”

The Seventh District covers all of Iowa and portions of Illinois, Indiana, Michigan and Wisconsin.

Oppedahl says farmer credit is eroding.

“Bankers told us they are expecting to see a higher level of foreclosures and some selloffs of possibly equipment and land over this winter.”

He blames the usual headwinds of low commodity prices and trade disruptions.

“It’s a bit surprising that we haven’t seen greater declines in farmland values over the past five or six years as agriculture has been in this extended downturn.”

Oppedahl says the long-term outlook for U.S. agriculture, and in turn farmland values, is positive.