Weiss Realty LLC

Wisconsin Ag News Headlines
Fed Survey: WI Farmland Values See a Bump During 3rd Quarter
Wisconsin Ag Connection - 11/10/2017

The value of Midwest farmland didn't change much overall during the third quarter of 2017, but Wisconsin and Iowa were two states that did see increases. According to the latest survey of agricultural lenders in the Seventh Federal Reserve District, ag property values between July through September were one percent lower from the same time last year; and were unchanged compared to the previous quarter.

In the most recent questionnaire of 201 rural bankers, survey respondents noted that Wisconsin properties were up two percent from last year, though they did drop one percent from the second quarter. Farmland in the Hawkeye State was up two percent for the year, but Indiana and Illinois both saw decreases in the values of their ag properties.

"The District did not experience a year-over-year decrease or increase in its agricultural land values greater than one percent in the past four quarters," said Reserve Economist David Oppedahl. "Such relative stability in farmland values had not occurred in the District since 1970."

He says agricultural credit conditions in the district continued to deteriorate. For the first time in 11 years, the availability of funds for lending by agricultural banks was down relative to a year earlier.

"There were still lower repayment rates on non-real-estate farm loans relative to a year ago in the July through September period of 2017," he said. "The index of loan repayment rates dropped to 60 in the third quarter of 2017, as three percent of responding bankers observed higher rates of loan repayment relative to a year ago and 43 percent observed lower rates. Loan renewals and extensions on non-real-estate agricultural loans were higher in the third quarter of 2017 relative to the same quarter of 2016."

In addition to lower farm product prices, difficult weather conditions during planting season, a trying drought and heavy rains during harvest all threatened to batter crops this year. Except for cattle producers, livestock operators saw improvements in product prices in the third quarter.

Looking ahead, survey results indicated that a majority of the respondents expected farmland values to remain stable in the fourth quarter. But they also felt that demand for farmland purchases by both farmers and nonfarm investors will be weaker this fall and winter compared with a year ago.

The banks also expressed the opinion that a weakening agricultural economy had led to weaker Main Street business activity. Until the outlook for farming improves, the economy of the rural Midwest is likely to remain constrained.

Send this article to a friend

Other Wisconsin Headlines
Byron Seeds
Osseo Plastics
Copyright © 2020 - Farms.com. All Rights Reserved.