FarmPolicy

September 18, 2019

Ag Economy; Farm Bill; Tax Extenders; WRDA; Transportation Bill; and, Organics

Agricultural Economy- Fed Districts Note Land Values Soften

Jacob Bunge reported in today’s Wall Street Journal that, “Farmland values fell in the first quarter in much of the Midwest, the latest sign of a downturn in the market after a yearslong boom fueled by rising commodity prices, according to Federal Reserve reports on Thursday.

“Average prices for agricultural land in the Federal Reserve Bank of St. Louis’s district, which includes parts of Illinois, Indiana and Missouri, fell 6% in the first quarter from the prior quarter, the bank said [related graph].”

Mr. Bunge explained that, “Prices for nonirrigated farmland in the Kansas City Fed district, which includes Kansas and Nebraska, declined 1.4% over the same period. Meanwhile, the Chicago Fed reported a 1% quarter-to-quarter decline, the first in five years for a district that includes Iowa, Michigan and parts of Illinois and Indiana [related graph].

“The reports indicate the U.S. farmland market has softened further, after cooling last year as U.S. grain and soybean prices fell sharply amid large harvests. Farmers produced the biggest corn crop ever last autumn, just one year after the nation’s worst drought in decades drove prices for the grain to record highs. Corn futures prices at the Chicago Board of Trade have fallen 24% over the past 12 months.”

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