Top: July 1, 2023 to October 1, 2023
Bottom: October 1, 2022 to October 1, 2023
Image courtesy of the Federal Reserve Bank of Chicago

Rising 5% in the third quarter of 2023 from a year ago, agricultural land values for the Seventh Federal Reserve District slowed their year-over-year increases (this was the smallest such gain in three years). Also, values for “good” farmland in the District overall were 1% higher in the third quarter of 2023 than in the second quarter, according to the respondents from 137 banks who completed the October 1 survey.

While 72% of the survey respondents anticipated District farmland values to be stable during the fourth quarter of 2023, 13% anticipated them to move up again in the final quarter of this year and 15% anticipated them to move down.

The District’s agricultural credit conditions were weaker in the third quarter of 2023 than a year earlier, as repayment rates for non-real-estate farm loans were no longer higher relative to the same quarter of the previous year. Moreover, renewals and extensions of such loans were slightly higher than a year ago.

In the third quarter of this year, demand for non-real-estate farm loans was down relative to a year ago for the 13th quarter in a row. Plus, the availability of funds for lending by agricultural banks was dramatically lower than in the third quarter of 2022. For the second quarter in a row, the average loan-to-deposit ratio for the District moved up, reaching 74.3% in the third quarter of 2023. Finally, average interest rates on agricultural loans kept increasing.

Farmland Values

The District had a year-over-year gain of only 5% in its agricultural land values in the third quarter of 2023. This was the lowest year-over-year increase for District farmland values since the third quarter of 2020. Indiana led the way with a year-over-year gain in farmland values of 16%; Illinois and Wisconsin had year-over-year growth in farmland values of 6% and 9%, respectively (see map and table below).

Growth in Iowa’s farmland values was stagnant in nominal terms. An Iowa banker expressed surprise that “farmland has not retreated in value.” In contrast, one Wisconsin banker cited “competition among large dairy operations” as the impetus for pushing farmland values higher there, and another noted that “nonfarm investors continue to push land prices higher.”

After being adjusted for inflation with the Personal Consumption Expenditures Price Index (PCEPI), District farmland values were up less than 2% in the third quarter of 2023 relative to a year ago (see chart 1). In nominal terms, the District’s agricultural land values in the third quarter of 2023 were 1% higher than in the second quarter.

For the complete November AgLetter, visit

By David Oppedahl