Farmland values soar in Chicago Fed District despite COVID-19

Strong commodity prices and continued government assistance are pushing farmland values up by 14 percent in the Central Midwest and 10 percent in the Central Plains. An Illinois farm banker surveyed by the Chicago Fed says, “Government payments have given a boost to the ag sector.” In its quarterly ag newsletter, the Chicago Fed says farmland values in the Seventh District climbed 14 percent on a year-over-year basis in the second quarter of 2021, their largest gain in eight years. Values are expected to climb even higher during the third quarter of the year because seven of every ten bankers are forecasting higher District farmland values during the July through September period this year, while 30 percent forecast stable values. The values for “good” agricultural land moved three percent higher in the second quarter, according to a survey of 152 bankers in the district. All five district states in the Chicago survey showed double-digit year-over-year gains in their agricultural land values, even though too few Michigan bankers responded to the survey to report a numerical change in farmland value.