Central Corn Belt Farmland Rises 12%

The value of “good” agricultural land in the central Corn Belt rose 12% in 2022, according to the latest survey of ag bankers conducted by the Federal Reserve Bank of Chicago. The increase lifted prices to a new peak, both in nominal (inflation-adjusted) and real terms.

“Although this result may seem like a letdown after the even larger increase in 2021, 2022’s annual gain was the second largest in the past ten years,” notes economist David Oppedahl who conducts the quarterly survey.

In the final quarter of 2022, he says, Illinois, Indiana, Iowa, and Wisconsin still had double-digit year-over-year increases in their agricultural land values. However, Indiana was the only district state to have an increase that was larger than in the fourth quarter of 2021. Illinois listed a 14% annual increase. Iowa and Wisconsin both posted 11% annual gains. Indiana reports a blistering 23% boom. On a quarterly basis, district farmland values were unchanged in the fourth quarter of 2022 from the third quarter, ending a string of eight consecutive quarterly increases.

After adjusting for inflation with the Personal Consumption Expenditures Price Index (PCEPI), 2022’s annual gain was 5% -- the second largest in the past five years. In real terms, 2022’s increase

puts district values up 12% from the 2013 peak. Values are up a staggering 36% from the 2013 peak in

nominal terms.

Looking ahead, 16% of survey respondents expect farmland values to rise during the first quarter of 2023, 10% believe they will fall and 74% look for them to be stable.