Illinois farmland values rose 1% during the past quarter, but were up 15% from a year ago.

Chicago Fed: Farmland values see limited impact from drought

Despite widespread drought conditions, bankers in the Chicago Federal Reserve district still foresee higher land values.

John Hawkins

Published: Aug 21, 2012

While this summer's drought contributed to less rapid increases in farmland values during the second quarter of 2012. The year-over-year gain in agricultural land values was 15 percent during the second quarter of 2012
for the Chicago Federal Reserve District.

The rise in the value of “good” farmland was 1 percent in the second quarter relative to the first quarter of 2012, based on a survey of 205 agricultural bankers.

"With 22 percent of the respondents anticipating higher farmland values for the third quarter of 2012 and only 4 percent anticipating lower ones, the drought did not seem to have stifled all the momentum of rising agricultural land values," economist David Oppedahl wrote in the district's Ag Letter.

Agricultural credit conditions strengthened overall in the second quarter of 2012 compared with a year earlier.

Repayment rates for non-real-estate farm loans were above the level of a year ago, with 94 percent of agricultural loans seen by survey respondents as having no significant repayment problems.

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