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Wednesday, August 17, 2011

Chicago Fed: Midwest Farmland Values Soar

by Calculated Risk on 8/17/2011 07:01:00 PM

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.
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.
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

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.