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.