For the first time in 18 months, the rise in Central Corn Belt farmland values stalled in the third quarter, reports the Federal Reserve Bank of Chicago.
Moreover, values for “good” farmland in the bank’s district overall were 2% lower in the third quarter of 2024 than in the second quarter, state Elizabeth Kepner and David Oppedahl who conducted the survey. In addition, their survey found 64% of survey respondents anticipate district farmland values will be stable during the fourth quarter of 2024. However, just 2% anticipate them to move up in the final quarter while 34% expect values to decline.
On an annual basis, the bank says land values in Illinois and Iowa slipped 1% while Indiana notched a 2% decrease. Wisconsin, however, reports a 4% annual gain in farmland values.
On a quarterly basis, the bank survey lists a 5% decline in Illinois, a 1% decline in Indiana, a 1% boost in Iowa and a 3% decrease in Wisconsin.
The bank’s report states ag credit conditions in the district softened in the third quarter while ag interest rates — in both nominal and real terms — fell slightly.
Repayment rates for non-real-estate farm loans during the quarter were lower than a year earlier. Loan repayment rates declined as 3% of responding bankers observed higher rates of loan repayment than a year ago while 27% observed lower rates. Renewals and extensions of non-real estate agricultural loans were higher in the quarter than a year ago, with 32% of the bankers reporting more and 4% reporting fewer.
Respondents also report seeing stronger demand for non-real-estate farm loans during the third quarter compared to a year ago. That marks the fourth consecutive quarter of stronger demand. Some 40% of respondents noted higher demand for non-real-estate farm loans than a year earlier and 20% noted lower demand.