Aug 18, 2020Midwest farmland values up slightly second quarter, AgLetter reports
The AgLetter reports farmland values for the Seventh Federal Reserve District in the second quarter of 2020 were 1% higher than a year ago. Values for “good” agricultural land in the second quarter of 2020 were largely the same as in the first quarter.
Given the widespread adverse effects of the pandemic in the second quarter of 2020, unsurprisingly agricultural credit conditions for the district weakened compared with a year earlier. For the second quarter of 2020, repayment rates for non-real-estate farm loans were again lower than in the same quarter of the previous year. The portion of the district’s agricultural loan portfolio reported as having “major” or “severe” repayment problems (8.3 percent) had not been higher in the second quarter of a year since 1988.
In the second quarter of 2020, the demand for non-real-estate farm loans was nearly the same as a year earlier, while the availability of funds for lending by agricultural banks was higher. Average nominal interest rates for feeder cattle, farm real estate, and operating loans ended the second quarter of 2020 at their lowest points in the history of the survey.
See the attached PDF for a full copy of the August Chicago Fed AgLetter.