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Wisconsin Farmland Values Trending Higher From Last Year
Wisconsin Ag Connection - 05/14/2021

All of the states within the Seventh Federal Reserve District saw their farmland rise in value during the first quarter of 2021 when compared to last year. According to the latest survey of agricultural lenders in the district, ag property values were seven percent higher than the same period in 2020, and rose three percent between the months of January through March over the previous quarter.

In the most recent questionnaire of 143 rural bankers, survey respondents noted that Wisconsin properties were up eight percent over last year, and rose four percent since the fourth quarter. Farmland in Iowa and Indiana was also four percent, while Illinois' went up by two percent for the year. Michigan trends were not calculated due to the lack of adequate survey responses.

"In a reversal from the first quarter of 2020, when the pandemic started to have negative impacts, district agricultural credit conditions improved during the first quarter of 2021," said Reserve Economist David Oppedahl. "The availability of funds to lend in the first quarter of 2021 was much higher than a year earlier, whereas demand for non-real-estate loans was lower. At 69.7 percent, the average loan-to-deposit ratio in the first quarter of 2021 was at its lowest level since the first quarter of 2015."

The report noted that annual cash rental rates for farmland in the district were four percent higher, bucking the downward trend of the previous seven years.

Oppedahl adds that a large increase in district farmland values wasn't surprising given that the survey results showed strong demand for agricultural ground, along with limited availability.

"For the three- to six-month period ending with March 2021 relative to the same period ending with March 2020, 76 percent of the survey respondents reported higher demand to purchase farmland and just 1 percent reported lower demand," he said. "Moreover, there was a lower amount of agricultural land for sale during the most recent winter and early spring relative to a year ago, as 15 percent of the responding bankers reported more farmland was up for sale in their areas and 35 percent reported less."

Looking ahead, bankers indicated that the trends of the past quarter are expected to continue well into the remainder of the year. About 74 percent of survey respondents anticipated farmland values to rise in the next three month, while 26 percent thought they would stabilize.


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