Corn Belt Farmland Values Soar 22%
The value of Central Corn Belt farmland soared 22% in 2021, according to the Federal Reserve Bank of Chicago. That surge is the largest gain posted in the past decade, reports David Oppedahl, senior economist who conducts the quarterly survey of ag bankers. In nominal terms, the annual increase is the largest since 2011.
In addition, values for “good” farmland in the bank’s district jumped 7% in the fourth quarter alone versus the third quarter. Looking ahead, 56% of the respondents expect farmland values to rise during the first quarter of 2022, 1% expect them to go down, while 43% expected them to remain the same.
Adjusted for inflation by the Personal Consumption Expenditures Price Index, district farmland values had an annual increase of 17% in 2021. That is also the largest real increase since 2011. The surge in farmland has more than offset their real declines from 2014 through 2019, reaching a new peak in 2021. At the end of 2021, district farmland values were nearly 7% higher than their previous peak in 2013 in real terms. Values were up even more (about 22%) in nominal terms after almost fully recovering to their previous peak (also in 2013) by the end of 2020.
Iowa posted the strongest annual gain with a 30% explosion in values. It marked a staggering 10% up burst in the fourth quarter alone. Indiana follows with a 22% annual surge with values up 6% in the fourth quarter versus the third quarter. The lower peninsula of Michigan lists a 19% annual increase with a 5% fourth-quarter rise. Illinois marks an 18% annual gain with an 8% fourth-quarter increase. Southeast Wisconsin reports in with a 12% annual boost and a 4% quarterly gain.
As expected, agricultural credit conditions during the fourth quarter continued to show signs of improvement. Only 0.8% of agricultural borrowers were not likely to qualify for operating credit at the survey respondents’ banks in 2022 after qualifying in the previous year (matching the survey’s record low, reached in 2012).
Annual Percent Change in District Farmland Values
Nominal and Real Farmland Values Over Time
