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Wisconsin Farmland Values Were Up From Last Year
Wisconsin Ag Connection - 05/12/2017

Wisconsin continued to outpace the rest of its neighbors in the growth of farmland property values during the past year. According to the latest survey of agricultural lenders in the Seventh Federal Reserve District, farmland values in the upper Midwest between January through March 2017 were about the same as a year ago; and were also unchanged compared to the previous quarter. However, Wisconsin ag property increased by five-percent from last year, and rose two percent from the fourth quarter of 2016.

In comparison, the survey noted that Indiana and Michigan values fell for the year, with Illinois showing no change in value and Iowa properties selling two-percent higher.

In the most recent questionnaire of nearly 200 rural bankers, survey respondents indicated that cash rental rates continued to go down this year, falling seven percent from early 2016.

"The demand to purchase agricultural land in the three- to six-month period ending with March 2017 was lower than in the same period ending with March 2016," said Reserve Economist David Oppedahl. "Additionally, the amount of farmland for sale, the number of farms sold, and the amount of acreage sold were down during the winter and early spring of 2017 compared with a year ago."

He adds that bankers feel farmland values would remain stable during the second quarter of this year, which would be a shift from the sentiment that farmland values would continue to decline held widely a year earlier.

Meanwhile, agricultural credit conditions slipped in the first quarter of 2017 relative to the same time a year earlier. Oppedahl says there were higher levels of loan renewals and extensions during the first three months of the year compared to the first quarter in 2016.

"Credit tightening continued in the first quarter of 2017, with 24 percent of survey respondents indicated that their banks required larger amounts of collateral for loans during the January through March period of 2017 relative to the same period of 2016," he said.

Looking ahead, about two-thirds of the bankers predicted that farmland values would remain stable in the second quarter, while 29 percent expected a decline. Farm real estate loan volumes are expected to decrease over the spring and summer relative to last year. In contrast, respondents projected that the overall volume of non-real-estate farm loans--such as financing for grain storage, machinery or cattle--would increase during the second quarter.

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