The value of good farmland in Iowa and the Seventh Federal Reserve District was unchanged from the April 1 to July 1, appearing to show the beginning of a moderating trend.
The last time there was no quarterly change in district farmland values was in 2009.
On a year-over-year basis, Iowa farmland values rose 18 percent from July 1, 2012, to July 1, 2013, according to the quarterly survey of agricultural bankers. The Seventh Federal Reserve District, which also includes Illinois, Indiana, Michigan and Wisconsin, posted an overall 17 percent increase in the value of good farmland during the same period.
Eastern Iowa farmland values rose 6 percent from quarter to quarter and 22 percent year over year, the most for any area of the state. Northeast Iowa farmland values rose 2 percent from April 1 to July 1 and 16 percent year over year.
The south central area of Iowa recorded a 9 percent drop in farmland values from quarter to quarter and an 18 percent increase from July 1, 2012, to July 1, 2013. Farmland values in north central Iowa dipped 3 percent from April 1 to July 1, but rose 12 percent year over year.
Western Iowa, which has experienced fairly severe drought this summer, recorded a 1 percent increase on a quarterly basis and a 15 percent jump from July 1, 2012, to July 1, 2013.
"While the farmland values on a year-over-year basis still appeared to be soaring, changes in farmland values on a quarterly basis may be presaging shifts in the year-over-year pattern in the latter half of 2013," said David Oppedahl, business economist with the Federal Reserve Bank of Chicago.
"Seven percent of the agricultural bankers surveyed expect farmland values to fall in the third quarter, the same as the percentage expecting them to rise during the period. Eighty-six percent of the survey respondents expect farmland values to remain stable."
Oppedahl said agricultural credit conditions were generally better in the second quarter of 2013 than a year earlier.
"The availability of funds for lending by agricultural banks was up relative to a year ago," Oppedahl said. "The banks’ deposits were enhanced not only by high crop prices but also by payments for insured losses due to last year’s drought."As of early August, $7.7 billion had been paid out for insured agricultural losses in the five District states for the 2012–13 crop year. The district payouts amounted to 44 percent of the U.S. total of $17.4 billion.