Chicago, IL — Agricultural land values for the Seventh Federal Reserve District surged 18 percent in the third quarter of 2021 from a year ago, according the the November 2021 Chicago Fed AgLetter released Monday, Nov. 15.
Moreover, values for “good” farmland in the District overall were 6 percent higher in the third quarter of 2021 than in the second quarter, according to the 151 bankers who responded to the October 1 survey.
Most survey respondents (68 percent) anticipated the District’s farmland values to go up again during the fourth quarter of 2021, while the rest anticipated stable District farmland values in the final quarter of this year (none anticipated them to go down).
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The District’s agricultural credit conditions were better in the third quarter of 2021 than a year earlier.
Repayment rates for non-real-estate farm loans were higher relative to the same quarter of the previous year for the fourth con-secutive quarter (accompanied by lower loan renewals and extensions).
In the third quarter of this year, the availability of funds for lending by agricultural banks was again higher than a year ago, even as the demand for non-real-estate farm loans remained lower than a year earlier for the fifth consecutive quarter.
The average loan-to-deposit ratio for the District was 68.8 percent in the third quarter of 2021. Average interest rates on agricultural loans—in both nominal and real terms—kept falling during the third quarter of 2021.
To read the full November 2021 AgLetter, click here.
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