After three consecutive years of declines, farmland values in the five states that make up the 7th Federal Reserve District rose 1 percent in 2017, with the highest increase coming in the Hawkeye State.
Iowa, Illinois, Indiana, Michigan and Wisconsin comprise the 7th Federal Reserve District, with the Federal Reserve Bank located in Chicago.
According to the AgLetter, written by senior business economist David Oppedahl of the Federal Reserve Bank of Chicago, the value for good farmland overall in Iowa rose 3 percent overall during 2017.
Indiana and Wisconsin each saw an increase of 2 percent overall in good farmland values, while Illinois lost ground with a 1 percent decrease. There were not enough bankers responding to the land values survey in Michigan to provide adequate information about the value of good farmland in that state.
While farmland values did increase, Oppedahl said that, “I don’t characterize values as rising so much as stabilizing.”
“There’s still a 10 percent decline from the peak in real terms,” he said of the high values of 2013. “The market hasn’t risen enough to have changed the overall trend, we’ll have to keep monitoring going forward to see if there’s going to be a turn.”
Despite losing ground in the past several years because of lower commodity prices, Oppedahl said that overall Midwest farmland is an attractive investment for the long-run.
“When you see how much corn and soybeans a farmer can get from an acre, it’s an amazing story of why we have cheap food in the U.S.,” he said. “Our agriculture has been so strong for generations.”
According to the Iowa Farmland Values Survey produced by Iowa State University, the price of Iowa farmland peaked in 2013 when its average value was $8,716 per acre. The value of that land fell three years in a row to a low of $7,183 an acre in 2016. In 2017, the value of that land climbed to an average of $7,326 an acre.
According to the Iowa Land Values Survey, Scott County has the most expensive farmland in the state with a value of $10,497 an acre in 2017, up from $10,335 an acre in 2016.
Credit conditions appear strong, Oppedahal added. Just over 6 percent of farmers in the 7th Federal Reserve district have either severe or major problems with payments, which is lower than it was in the early 2000s. The proportion of farmers who likely will not qualify for operating loans is under 3 percent for the district.
Quad-City Region county crop estimates
In the Iowa Quad-City region, Scott County farmers produced 23.4 million bushels of corn in 2017, according to the National Agricultural Statistics Service, or NASS, the statistical arm of the U.S. Department of Agriculture. That is up from 22.5 million bushels in 2016. Cedar County farmers produced 34.1 million bushels, down from 34.6 million bushels.
Clinton County farmers produced 41.3 million bushels of corn, up from 40.3 million, while Jackson County farmers produced 22.85 million bushels, up from 22 million bushels. Muscatine County farmers produced 17.3 million bushels of corn in 2017, down from 18.4 million bushels in 2016.
In the Illinois Quad-City region, Rock Island County farmers produced 14.3 million bushels of corn in 2017, up from 12.6 million bushels in 2016. Carroll County farmers produced 34.7 million bushels of corn in 2017, up from 33.8 million bushels the year before. Mercer County farmers produced 32.6 million bushels of corn compared to 30.2 million in 2016. Whiteside County farmers produced 46.3 million bushels of corn, compared to 46.4 million bushels in 2016.
In terms of soybeans, Scott County farmers produced 4.4 million bushels in 2017, down from 4.6 million in 2016. Cedar County farmers produced 6.9 million bushels, up from 6.8 million bushels while Clinton County farmers produced 6.8 million bushels, down from 6.9 million. Jackson County farmers produced 3.18 million bushels of soybeans in 2017, down from 3.16 the prior year. Muscatine County farmers produced 4.44 million bushels, up from 4.22 million bushels.
Rock Island County farmers produced 2.7 million bushels of soybeans in 2017, the same as in 2016. Carroll County farmers produced 3 million bushels, up from 2.9 million bushels in 2016. Henry County farmers produced 10.4 million bushels, the same as in 2016, while Mercer County farmers produced 6.4 million bushels, up from 6.2 million bushels. Whiteside County farmer produced 5.6 million bushels of beans, up from 5.1 million bushels.
Lower commodity prices once again held crop values in check during 2017.
The production of Iowa’s field and miscellaneous crops in 2017 was $14 billion, down from 14.6 billion in 2016, according to the National Agricultural Statistics Service. Iowa’s crops in 2015 were valued at $14.1 billion.
The value of corn for grain production in Iowa in 2017 was valued at $8.47 billion, down from $9 billion in 2016. Iowa’s corn crop in 2015 was valued at $8.8 billion.
The value of Iowa’s soybean crop in 2017 was $5.19 billion, down from $5.29 billion in 2016. The state’s soybean crop was valued at $4.93 billion in 2015.
The value of Illinois field and miscellaneous crops in 2017 was $13.6 billion, down from $13.9 billion in 2016, and but up from $12.8 billion in 2015.
The Value of Illinois’ corn crop was $7.37 billion in 2017, down from $7.73 billion in 2016. The value of Illinois’ corn crop in 2015 was $7.42 billion.
The value of Illinois’ soybean crop in 2017 was $5.87 billion, down from $5.79 billion in 2016. The value of Illinois’ soybean crop in 2015 was $5 billion.