

Wisconsin Ag News Headlines Wisconsin Farmland Values Trending Lower From Last Year

Wisconsin Ag Connection - 05/15/2020



All of the states within the Seventh Federal Reserve District saw their farmland rise in value during the first quarter of 2020 when compared to last year, with the exception of Wisconsin. According to the latest survey of agricultural lenders in the district, ag property values were one percent higher than the same period in 2019, but remained unchanged between the months of January through March from the quarter previous.



In the most recent questionnaire of 113 rural bankers, survey respondents noted that Wisconsin properties were down three percent from last year, and fell four percent since the fourth quarter. Farmland in Illinois rose by just one percent in value, while Iowa and Indiana rose two- and four-percent for the year, respectively. Michigan trends were not calculated due to the lack of adequate survey responses.



"The survey covered farm sector activity in the entire first quarter of 2020, most of which occurred before the proclamation that COVID-19 represented a national emergency in the U.S.," said Reserve Economist David Oppedahl.



The report noted that annual cash rental rates for farmland in the district were down for the seventh consecutive year in 2020.



Oppedahl says with the prices of most farm products dropping at the end of the first quarter, it was not much of a surprise that key measures of agricultural credit conditions deteriorated during that time.



"Once again, repayment rates for non-real-estate farm loans were lower than a year ago, plus renewals and extensions of these loans were higher," he noted. "Demand for non-real-estate loans in the first quarter of 2020 grew from a year ago. Both the amount of collateral required and the availability of funds to lend were also higher than a year earlier."



Looking ahead, bankers indicated that they had concerns about the disruption in livestock marketing and ethanol from the pandemic shutdown. The lenders were evenly split on whether land values would decrease or remain unchanged; but none of them anticipate farmland prices to go up in the months ahead.





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