Corn Belt Sees Consecutive Annual Declines

The Seventh District registers back-to-back drops in farmland values for the first time since the mid-1980s.

NATIONAL — TREND
Two factors put downward pressure on row crops in 2015: record (or near-record) harvests; and the strong dollar, which slowed exports. The national corn harvest was the third largest ever, and soybean output set a new record.
On average, corn prices at the end of 2015 were 4 percent lower than 2014 and 17 percent lower than 2013 nationwide. The drop in bean prices was even more pronounced: 15 percent lower at the end of 2015 versus 2014 and 33 percent lower vis-à-vis 2013.
MIDWEST — FOCUS
Of the 199 bankers who responded to the Seventh District’s survey, nearly 60 percent anticipated agricultural land values to decrease in early 2016. None expected any increase in land values.

Download a complete copy of the Seventh Federal Reserve District’s AgLetter at www.ChicagoFed.org.