Posted: 05.24.2010
Wisconsin’s dependence on the dairy industry is still dragging down agricultural credit and the value of farmland in 2010. The latest survey was released for the first quarter of 2010 from the Seventh Federal Reserve District.
Agricultural credit conditions were mixed for the first quarterof 2010. Wisconsin’s credit conditions were uniformly poor, indicative of the tough climate for dairy producers.
Agricultural land values increased 4 percent for the first quarter of 2010 compared with the first quarter of 2009. However, the year-over-year gains in the value of “good” agricultural land were restricted to the southern part of the District. Farmland values increased 4 percent in Illinois, 7 percent in Indiana, and 8 percent in Iowa.
Wisconsin farmland values decreased 1 percent.
While farmland values edged higher, cash rental rates for agricultural land plummeted, rising just 1 percent in 2010. Cash rental rates in Illinois were unchanged from 2009. The rest of the District saw increases in cash rental rates: 3 percent in Indiana, 1 percent in Iowa, and 8 percent in Wisconsin (in part reflecting a rise from a low number last year).
Some respondents noted cash rental rates were too high for operating loans to be dispersed on a cash flow basis. Moreover, tight and negative margins were expected to create difficulties for some borrowers, since crop income may likely be down from a year ago, though input costs may likely be up.
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