The Seventh Federal Reserve District states of Illinois, Indiana, Iowa, Michigan and Wisconsin continue to play a key role in the agricultural economy of the United States, as well as the world. Although agriculture's share of the total Seventh District economy is decreasing, it remains a very important part of the larger economy.
Year-over-Year Changes in Farmland Values
Index of Demand for Agricultural Loans
Index of Repayment Rates for Agricultural Loans
Interest Rates Charged on New Farm Loans in the Seventh District
Notes: For charts of indices, bankers responded to each item by indicating whether conditions during the current quarter were higher, lower, or the same as in the year-earlier period. The index numbers are computed by subtracting the percent of bankers that responded "lower" from the percent that responded "higher" and adding 100. These indices exclude real estate loans.
The chart of interest rates is based on data from the Chicago Fed's Land Value and Credit Conditions Survey. The black line indicates farm operating loans and the red line indicates farm real estate loans. This chart shows the average interest rates charged on farm loans. Since farming is a very capital-intensive industry, many farmers make extensive use of borrowed funds. High interest rates mean larger expenses and less profit.
Source for all charts: Land Value and Credit Conditions Survey, Federal Reserve Bank of Chicago
Data on credit conditions at Seventh District agricultural banks and on farmland values in the Seventh District are available for download as spreadsheets. Recent data for credit conditions are also available on the third page of the AgLetter.
2012 Agriculture Conference
On November 27, 2012, the Federal Reserve Bank of Chicago held a conference to examine trends in farmland leasing and analyze various types of leases, within the context of the changes facing agriculture in the Midwest. The theme was Farmland Leases: Tales, Types and Trends. The March 2013 Chicago Fed Letter summarizes the event.
The 2012 cash rents for midwestern farmland increased 17 percent from a year ago, according to the latest Chicago Fed survey. Cash rental rates for farmland in the Midwest have risen quickly in recent years, but still have lagged the increases in agricultural land values. Read more...
On November 15, 2011, the Federal Reserve Bank of Chicago held a conference to explore the factors contributing to large increases in agricultural land values and cash rental rates in the Midwest. The theme was Rising Farmland Values: Causes and Cautions. Farmland values increased 16 percent from a year ago in the first quarter of 2011; 2011 cash rents for farmland increased 16 percent as well. At the conference, experts from academia, industry and policy institutions will present research on the causes of rapid increases in agricultural land values and cash rents, as well as their interrelationship. Presentations are now available on the Agenda tab on the conference site. Read more...