After years of continuous quarterly and year-over-year increases, the average value of Iowa farmland declined slightly from quarter to quarter at the end of 2013 and on a year-over-year basis.
A Federal Reserve Bank of Chicago survey found “good” Iowa farmland fell 1 percent from the third quarter of 2013 to the end of the fourth quarter. On a year-over-year basis, the average value of agricultural land in Iowa slid 2 percent from Jan. 1, 2013, to Jan. 1, 2014.
Overall, the five-state Seventh Federal Reserve District had an annual increase of 5 percent in farmland values, but appeared to be slowing. The survey of 186 agricultural banks across the district found agricultural land values rose 3 percent from the third quarter to the fourth quarter of 2013.
David Oppedahl, senior economist with the Federal Reserve Bank of Chicago, said a majority of the survey respondents anticipated farmland values to remain stable during the current quarter of 2014, but the rest of the expectations “tilted toward decreases in farmland values during the period.”
“While crop production in the five-state area bounced back strongly from the 2012 drought, bankers said drought returned to the Midwest in 2013, hitting Iowa the hardest among the Seventh District states,” Oppedahl said.
The district’s corn yield surged 42 percent in 2013 from 2012 to 169 bushels per acre. The soybean yield rose 7.5 percent in 2013 from 2012 to 46.9 bushels per acre.
Iowa’s corn production in 2013 was just 15 percent higher than in 2012 and soybean production was 0.8 percent lower last year than in 2012.
“Agricultural credit conditions deteriorated in the fourth quarter of 2013 relative to the fourth quarter of 2012, especially in Iowa and Wisconsin,” Oppedahl said. “Iowa and Wisconsin were the only states in the district to have lower rates of loan repayment in the final quarter of 2013 compared with a year earlier.”
As of late January 2014, $2.22 billion had been paid out for insured 2013 agricultural losses in the five states of the district, representing 23 percent of the U.S. total of $9.60 billion in crop insurance indemnities. Iowa accounted for 61 percent of the district’s insured agricultural losses in 2013.