Central Corn Belt Farmland Values Soar 18%

The value of “good” agricultural land across the three “I” states soared 18% on an annual basis through the third quarter, according to the Federal Reserve Bank of Chicago. Low interest rates, government support and higher than normal farm incomes all contributed to the gains.

This was the largest year-over-year increase in the district’s farmland values in nine and a half years, the bank states. Iowa led the way with an annual jump  of 28%; other states also saw double-digit year-over-year growth in farmland values. After being adjusted for inflation with the Personal Consumption Expenditures Price Index (PCEPI), District farmland values were still up 13%.

In nominal terms, land values in the third quarter of 2021 were 6% higher than in the second quarter, the bank states.

Sixty-eight percent of survey respondents anticipate district farmland values to rise in the final quarter of 2021, and the rest anticipate them to be stable. In addition, a large majority of respondents expect both farmers and nonfarm investors to have stronger rather than weaker demand to acquire farmland this fall and winter compared with a year earlier. Also, respondents overwhelmingly anticipate a rise in the volume of farmland transfers during this fall and winter relative to a year ago, the bank comments.

                          Annual Percentage Change in Farmland Values