AgLetter: November 1998
Farmland values weakened in the Seventh Federal Reserve District during the third quarter, according to our survey of 390 agricultural bankers. On average, farmland values were down 1 percent during the quarter, the first such decline experienced on a District-wide basis in this decade. The weakness narrowed the gain for the twelve-month period ending September 30 to 4 percent. The survey also revealed that farmers backed away from purchasing farmland to a larger degree than non-farm investors. With respect to credit conditions, the survey indicated that loan demand was up, on average, as gains in Illinois and Iowa offset weakness in Indiana, Michigan, and Wisconsin. Interest rates moved lower during the third quarter, and loan repayment rates showed signs of further deterioration.