by Calculated Risk on 8/17/2011 07:01:00 PM
Wednesday, August 17, 2011
Chicago Fed: Midwest Farmland Values Soar
From the Chicago Fed: Second Quarter Midwest Farmland Values Soar
Farmland values for the second quarter of 2011 climbed 17 percent from the level of a year ago in the Seventh Federal Reserve District. The value of “good” agricultural land increased 4 percent in the second quarter compared with the first quarter of 2011, according to a survey of 226 agricultural bankers in the District.Apparently there is quite a bit of investor buying (Gold, guns and farmland?). The Chicago Fed will hold a conference on farmland values in November: Rising Farmland Values: Causes and Cautions
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At 17 percent, the year-over-year increase in the value of District farmland for the second quarter of 2011 was the largest recorded since
the 1970s.
Back in the 1980s, when farmland values collapsed, many farmers lost their land - and many banks went under. I just hope the lenders and farmers remember the '80s and keep the loan-to-value for farmland down. I hope the regulators are paying attention too.