Big boost in Indiana farmland values
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Indiana farmland values had the biggest one-year increase of any Midwestern state in 2022, according to the latest report from the Seventh Federal Reserve Bank district in Chicago. The quarterly report reveals good quality farmland in the Hoosier State jumped 23% higher compared to January 2022.
District-wide, which includes all or part of Indiana, Illinois, Iowa, Michigan, and Wisconsin, farmland values climbed 12% year over year. The Chicago Fed says this is the second largest increase in the past decade.
Compared to the previous fiscal quarter, farmland values were unchanged district-wide, but up one percent in Indiana.
“District farmland values got a boost from a record year for crop revenues. Even though District output of corn and soybeans was down from 2021, revenues for these crops were up in 2022 because of higher crop prices,” said David Oppedahl, a policy advisor for the Chicago Fed.
Oppedahl says according to the 147 agricultural bankers who responded to the January survey, 16% expected farmland values to rise during the January through March period of 2023, 10% expected them to fall, and 74% expected them to be stable.
The improving income stream is also resulting in stronger agricultural credit conditions for the district. Oppedahl says the share of the district’s farm loan portfolio assessed as having “major” or
“severe” repayment problems was 1.2% in the fourth quarter of 2022. The fed says that’s lower than the share reported in any final quarter since collection of the data began in 1998.