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Washington,
May 21 – First quarter surveys for the Seventh Federal Reserve District show
generally positive but mixed results, with year-over-year farmland values up a
solid 4 percent. That overall figure includes increases of 7 percent in Indiana and 8 percent in Iowa
while Wisconsin farmland values decreased 1
percent. For the first quarter of 2010 relative to the fourth quarter of 2009,
District farmland values rose 2 percent, with only Illinois having an increase of less than 2
percent.
The
Federal Reserve Bank of Chicago’s
May Agricultural Newsletter reported that:
- “There was also a quarterly
increase of 2 percent in the value of “good” agricultural land, according
to the April 1 surveys returned by 215 District bankers. At 1 percent, the
growth in District farmland cash rental rates slowed down dramatically
from 2009.
- “The demand to purchase
farmland during the first quarter of 2010 strengthened from a year ago. A
rising share of purchases by farmers buoyed this demand. However, the
amount of farmland for sale, the number of farms sold, and the acreage
sold weakened in the first three months of 2010 relative to the same
period in 2009.
- “The vast majority of the
bankers anticipated stable land values during the second quarter of 2010.
- “Trends in agricultural
credit conditions were unchanged during the first quarter of 2010. There
was stronger demand for non-real-estate farm loans and greater
availability of funds for lending compared with the same period in 2009.
Loan repayment rates were lower, while renewals and extensions of agricultural
loans were higher.
- “Interest rates on farm loans
continued to move lower, averaging 6.13 percent for new operating loans
and 6.04 percent for real estate loans. Loan-to-deposit ratios averaged
73.7 percent—more than 5 percent under the level preferred by the
respondents.”
For more
details on the survey’s findings, go to: www.chicagofed.org/digital_assets/publications/agletter/2010_2014/may_2010.pdf
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