Value of Wisconsin Farmland Remained Flat in 2018
Friday, February 15th, 2019 -- 7:59 AM
(Wisconsin Ag Connection) -After trending upward at two- to three-percent annually for about five years, the value of Wisconsin farmland remained flat during 2018, and actually dropped in value during the fourth quarter.According to the latest survey of agricultural lenders in the Seventh Federal Reserve District, regional farmland prices were also unchanged for the year, but rose one-percent during the final three months because of strong sales in Indiana. In the most recent questionnaire of 183 rural bankers, survey respondents felt that deteriorating ag credit conditions continued to affect the district in the fourth quarter--forcing repayment rates on non-real-estate farm loans to go down. Oppedahl notes that about 2.4 percent of current agricultural borrowers were not likely to qualify for operating credit at the survey respondents' banks in 2019 as in 2018.
For those who can borrow money, interest rates have increased by late 2018 to levels not seen since 2010 and 2011. Meanwhile, dairy farm owners are continuing to struggle. One Wisconsin banker said financial stress and the tough January weather are causing many producers to consider selling out. Looking ahead, most banks predict farmland values to be stable in the first quarter of 2019, while 24 percent expected them to decline. If that happens, district ag land values are likely to be little changed in the first three months of the year.
Feel free to contact us with questions and/or comments.