CHICAGO (Reuters) — The average price of quality U.S. farmland fell three percent in 2014, marking the first annual decline in almost 30 years, the Federal Reserve Bank of Chicago said in its quarterly survey of district bankers on Thursday.
“The District’s annual decrease of three percent in good farmland values for 2014 was the first loss for a year since 1986,” the bank said in its survey of 224 regional farm banks in the north-central United States, the main production area for corn, soybeans and hogs. “Still, at the end of 2014 the index of inflation-adjusted agricultural land values for the District was 68 percent higher than at its 1979 peak from the 1970s boom.”
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The Chicago Fed said half of the regional farm bankers, citing the depressed price outlook for grains, expect farmland prices to continue to fall in the first quarter of 2015 despite holding steady in the last three months of 2014 with the previous quarter.
The St. Louis Fed reported earlier Thursday that farmland values in its district were steady in late 2014 with a year ago. The Kansas City Fed will release its bank survey on Friday.
