Businessweek reports that farmland values in the Midwest rose 6 percent in the second quarter "as higher grain prices made real estate more attractive."
Farmland values in Iowa rose the most at 8 percent, while prices in Illinois rose 5 percent and prices in Indiana rose 4 percent. Values in Wisconsin, however, declined due to reduced profitability in the dairy industry.
The gains have been attributed to increasing demand for wheat, corn and soybeans. Additionally, credit conditions improved "as an index for loan demand rose to 98 percent from 88 a year earlier. The average for loan-to-deposit ratios at commercial banks in the district advanced to 74.5 percent from 73.7 percent in the previous quarter."
Interest rates for agricultural loans fell in the second quarter as well. "The average was 6.12 percent on new operating loans, down from 6.18 percent in the year-earlier quarter and down 260 basis points from the most recent peak four years earlier."
To read the Businessweek story, click here.
Posted: 08/30/2010
