The Federal Reserve Bank of Chicago’s latest survey of
agricultural bankers indicated that the uptrend in farmland
values continued this spring, but at a slower pace.
A weighted average of the nearly 375 responses found
that District farmland values rose 1.4 percent during the
second quarter and more than 8 percent during the 12
months ending with June. The respondents also indicated
that farm loan demand continued strong in the second
quarter. However, the availability of funds at banks for
making new farm loans apparently tightened due to relatively
slow growth in deposits and stiffer competition
from other farm lenders. In addition, farm loan repayment
rates slowed, especially in areas where the troubled dairy
sector is more prevalent. Despite slower repayments, the
bankers continued to judge the quality of their farm loan
portfolio as high.