Despite the significant price drop for agricultural commodities such as corn and soybeans in the past two years, that change is not being strongly reflected in the farmland values in the Upper Midwest states.
That's according to the latest reports and surveys by the Federal Reserve Bank of Chicago. Its quarterly updates are based on data collected from about 220 agricultural sector bankers in Wisconsin, Michigan, Illinois, Iowa, and Indiana.
For the third quarter of 2015, the value of good quality farmland in those five states was unchanged from its value a year earlier, the Federal Reserve Bank reported. Iowa stood out as an exception, having reported small declines in value for four consecutive quarters, including 3.7 percent for the period from March to September in 2015 and by 11.3 percent since September of 2014.
Average farmland values in Wisconsin and Michigan during that same period were up by 4 and 5 percent respectively, the report indicated. In Illinois, the average value was down by 4 percent.
In mid-2015, the Chicago bank's report put the average farmland values at $8,000 per acre in Iowa, $7,500 in Illinois, $7,150 in Indiana, and $5,750 in Ohio. No number was reported for Wisconsin or Michigan.
The last time that Federal Reserve Bank of Chicago reported an overall decline in farmland values within its district for two consecutive quarters was in 2009. From 2010 through 2014, a majority of the quarters had average annual increases of least 12 percent.
Drop in farm income
Farm income during 2015 was down by 55 percent from 2013, Federal Reserve Bank of Kansas City executive Nathan Kauffman told attendees at an American Farm Bureau convention and trade show in early January.
Referring to farmland value trends in the region, Kauffman said 'it's not what you have expected when corn drops from more than $6 to less than $4 per bushel.' Both land prices and rents have been adjusting quite slowly to the setbacks on commodity crop prices, he observed.
Kauffman pointed out the very good quality farmland is still attracting high prices while decreases were being seen for prices on marginal lands. He also suggested that price changes have been minimal in the past two years because not much farmland has been offered for sale.