Farmland Values Continue to Climb

Over the past three months, the value of good Indiana farmland has increased 8% over the previous quarter, according to the latest data from the Seventh Federal Reserve District in Chicago. The Fed also says year-over-year, the value has increased 23% in the Hoosier State.

District-wide, which includes all or part of Indiana, Illinois, Iowa, Michigan and Wisconsin, land values surged 23% year over year and four percent higher than the fourth quarter of 2021.

Of the five states, Indiana had the highest quarterly increase, but Iowa had the largest annual increase at 28%.

“Sustained strong demand for agricultural ground and higher transaction prices seemed to induce selling; there was a larger amount of land for sale during the most recent winter and early spring relative to a year ago,” Federal Reserve Bank Senior Business Economist David Oppedahl wrote in his commentary.

The Fed says even after adjusting for inflation, the year-over-year gain in district farmland for the first quarter of 2022 was higher than any other since Q1 of 2012.

The data is based on a survey of 136 agricultural bankers.

“Around three-quarters 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. None of the respondents viewed farmland as undervalued,” said Oppedahl.

Looking ahead, 48% of the bankers expect farmland values will continue to rise during the next quarter, 51% expect them to remain relatively the same and one percent is expecting a drop in farmland values.

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