AgLetter: February 1996
Survey responses from about 400 agricultural bankers show that farmland values in the Seventh Federal Reserve District closed out 1995 by rising 2 percent during the final quarter. For the year, District farmland values were up 5 percent. This marked the ninth consecutive annual gain in District farmland values, with the yearly increases also averaging about 5 percent. The survey also showed that interest rates on new farm operating and real estate loans declined during the fourth quarter. Gains in loan demand moderated while the availability of funds for agriculture lending improved. Furthermore, it appears that relatively strong grain prices have boosted the pace of loan repayments, and will spur another increase in spending by farmers on machinery and equipment this year.