Corn Boom Sends Farmland Value Up Most Since 2012 in Midwest
(Bloomberg) -- The global pandemic isn’t hurting the value of farmland in the heart of the U.S. Corn Belt.
Agriculture land values rose 6% last year, the biggest gain since 2012, across the Seventh Federal Reserve District, a five-state region including all of Iowa and most of Illinois, Indiana, Michigan and Wisconsin. Bankers say more gains are expected this quarter, according to the Chicago Fed’s latest AgLetter.
Along with lower interest rates, farmland fortunes were boosted by last year’s rebound in revenues from corn and soybeans. Iowa, hit hardest by an August derecho storm that swept across multiple states and caused $11 billion in losses, was the only state with lower crop production compared with a year earlier. A pickup in trade of livestock products also helped offset income losses from the pandemic.
For the first time since the first three months of 2011, a majority of surveyed bankers, at 58%, predicted farmland values would go up in the following quarter, which in this case is the first three months of 2021. Forty-two percent of respondents expect the land worth to remain stable, with no one seeing a decline, according to the poll of 137 agricultural bankers.
“According to the survey results, the agricultural outlook seemed to be the rosiest in years,” wrote David B. Oppedahl, a Chicago Fed economist who compiles the bank’s quarterly AgLetter.
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