2017 Fourth Quarter Farm Economy Conditions in the Midwest

Farmland values in the Seventh Federal Reserve District had an annual increase of 1 percent for 2017, following three consecutive yearly declines. Values for ‘good’ agricultural land in the fourth quarter of 2017 were overall unchanged from the third quarter, according to 185 survey respondents representing agricultural banks across the District. Repayment rates on non-real-estate farm loans were lower in the October through December period of 2017 than in the same period of 2016, and rates of loan renewals and extensions were higher—which indicated greater stress in the credit environment. In real terms, there has been a 10 percent correction in the District’s farmland values from their peak in 2013 to the end of 2017. Even so, the index of inflation-adjusted farmland values for the District was 58 percent higher in 2017 than at its previous peak in 1979.