Seventh District Agricultural Real Estate Values

Notes: This chart shows the average annual change in farmland values in the Seventh District, using data from the Chicago Fed's Land Values and Credit Conditions Survey. Farmland values account for a significant part of farm sector asset values and equity. As such, the movement in farmland values is an important indicator of agriculture's economic health. Farmland values have an impact on the owner's ability to borrow and on the quality of a bank's loan portfolio because they affect the borrower's financial position as well as the bank's collateral. Farmland values rose rapidly in the 1970s, partly on account of high inflation, and then crashed in the 1980s. Many farmers experienced financial difficulties at that time because both income and farmland values dropped.

Source: Chicago Fed staff calculations based on data from the Federal Reserve Bank of Chicago, Land Values and Credit Conditions Survey.

Note: By constructing indexes of farmland values, one can see that nominal and real farmland values recovered from the crash of the 1980s, established new records, and then declined starting in 2014 until a resurgence in 2020.

Sources: Chicago Fed staff calculations based on data from the Federal Reserve Bank of Chicago, Land Values and Credit Conditions Survey; and U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Price Index (PCEPI), from Haver Analytics.

Note: Michigan, one of the five states in the District, has had insufficient numbers of survey responses in recent years, so its farmland value data are not plotted.

Source: Chicago Fed staff calculations based on data from the Federal Reserve Bank of Chicago, Land Values and Credit Conditions Survey.