AgLetter: May 2009

There was a year-over-year decrease of 2 percent in the value of “good” agricultural land—the first decline in a twelve month period since 1987—according to a survey of 227 bankers in the Seventh Federal Reserve District on April 1, 2009. Also, there was a quarterly decrease in District farmland values of 1 percent in the fi rst quarter of 2009. Furthermore, the growth in farmland cash rental rates moderated in the District for 2009, with an increase of 7 percent. The number of survey respondents who observed that the demand to purchase farmland during the fi rst three months of 2009 was lower relative to the same period last year exceeded those who observed higher demand. The number of farms sold, the acreage sold, and the amount of farmland for sale were all below the levels of the prior year. Nearly a third of the bankers anticipated further declines in land values during the second quarter of 2009, while almost two-thirds anticipated stable land values.