2018 First Quarter Farm Economy Conditions in the Midwest

David Oppedahl, a Senior Business Economist at the Chicago Fed, explained in The AgLetter that, “Agricultural land values for the Seventh Federal Reserve District showed signs of stabilizing in the first quarter of 2018, as farmland values were unchanged from a year ago. On average, ‘good’ farmland values in the first quarter of 2018 rose 1 percent from the fourth quarter of 2017, according to the survey responses of 181 District agricultural bankers.”  “Additionally, cash rental rates for District farmland decreased again in 2018; however, their year-over-year decline of 5 percent was smaller than the decline recorded for 2017.”The Fed report explained that, “District agricultural credit conditions tightened further during the first quarter of 2018. Once more, repayment rates for non-real-estate farm loans were down from a year ago, and renewals and extensions of these loans were up from a year earlier…Average nominal and real interest rates on farm loans increased in the first quarter of 2018 from the previous quarter.