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Wisconsin Farmland Values Trending Higher From Last Year
Wisconsin Ag Connection - 05/16/2022

All of the states within the Seventh Federal Reserve District saw their farmland rise in value during the first quarter of 2022 when compared to last year. According to the latest survey of agricultural lenders in the district, ag property values were 23 percent higher than the same period in 2021, and rose four percent between the months of January through March over the previous quarter.

In the most recent questionnaire of 136 rural bankers, survey respondents noted that Wisconsin properties were up 13 percent over last year, and rose four percent since the fourth quarter. Farmland in Iowa, Illinois and Indiana were also higher for the year. Michigan trends were not calculated due to the lack of adequate survey responses.

"With demand to purchase agricultural land up yet again this year, there was a larger amount of farmland for sale in the three- to six-month period ending with March 2022 than in the same period ending with March 2021," said Reserve Economist David Oppedahl. "In addition, the number of farms and the amount of acreage sold were up during the winter and early spring of 2022 compared with a year earlier."

The report noted that annual cash rental rates for farmland in the district were 11 percent higher, surpassing last year's gain of four percent (this first such gain after the downward trend of the previous seven years).

Oppedahl adds that agricultural credit conditions improved in the district during the first quarter of 2022.

"Repayment rates for non-real-estate farm loans were higher in the January through March period compared with a year ago, and the renewals and extensions of these loans were lower," he said. "The availability of funds for agricultural borrowing in the first quarter of 2022 expanded from a year earlier, whereas demand for non-real-estate loans contracted. At 65.0 percent, the average loan-to-deposit ratio in the first quarter of 2022 was at its lowest level since the second quarter of 2013."

Looking ahead, bankers indicated that the trends of the past quarter are likely to remain strong well into the remainder of the year. About 48 percent of survey respondents anticipated farmland values to rise in the next three month, while 51 percent thought they would stabilize. By state, about 75 percent of survey respondents in Illinois, Indiana, and Iowa were of the view that agricultural ground was overvalued, yet the majority of respondents in Michigan and Wisconsin were not.

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