Agricultural land values in the Midwest have climbed 14% year over year, reflecting the largest gain in eight years. In its quarterly land values report, the Seventh Federal Reserve Bank district in Chicago says good quality Indiana farmland is 12% higher, compared to the same period a year ago.

The Chicago Fed says all five states in the district reported double-digit year-over-year gains in their agricultural land values. The Chicago Fed says the value of good farmland climbed 3% from the first quarter districtwide and 2% in Indiana.

Two weeks ago, agricultural economists from Purdue University reported farmland values in Indiana had reached an all-time high.

The Chicago Fed land values report is based on a survey of 152 bankers in the Midwest that serve agricultural communities. The fed says given strong agricultural credit conditions, most survey respondents anticipated farmland values will keep rising. Seventy percent of responding bankers are projecting farmland values to increase in the third quarter of 2021, 30% expect them to be stable and none projected a decrease.

“While district agricultural bankers seemed optimistic about the farm sector over the short term, some cautioned about its longer-term prospects, given the uncertainties surrounding the course of the pandemic and government responses, as well as trade flows and input costs,” Chicago Fed Senior Business Economist David Oppedahl commented in the report.

The district is made up of the northern two-thirds of Indiana, Illinois, most of Michigan and Wisconsin and all of Iowa. Iowa saw the biggest gains with an increase of 18% year over year and 6% from last quarter.