The value of good farmland in Indiana had the highest year-over-year increase of the five states that make up the Seventh Federal Reserve District.
In its quarterly report, the Chicago Federal Reserve Bank said farmland in the Hoosier State climbed 9% in 2020. For the fourth quarter, Indiana farmland climbed 2%.
The district covers the northern half of Indiana and Illinois, all of Iowa, and most of Michigan and Wisconsin.
District-wide, agricultural land had an annual gain of 6%, which the federal reserve says was the largest increase since 2012. During the fourth quarter of 2020, good farmland across the five-state district saw a 4% increase.
The report is based on a survey of 137 agricultural bankers who expect the trend for higher land values to continue.
The federal reserve says for the first time since the first quarter of 2011, a majority of responding bankers (58%) predicted farmland values to go up in the next quarter. The rest of the respondents (42% predicted them to be stable.
“Notably, none of the survey respondents predicted farmland values to go down. The agricultural outlook seemed to be the rosiest in years,” said David Oppedahl, senior business economist for the Seventh Federal Reserve District.
Oppedahl says the district also experienced positive changes in its agricultural credit conditions during Q4 of 2020. He says repayment rates for non-real-estate farm loans were higher than a year ago, and loan renewals and extensions were lower than a year earlier.
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