By DOUG SCHMITZ

Iowa Correspondent

CHICAGO, Ill. — The Federal Reserve of Chicago has reported Midwest farmland values for the Seventh Federal Reserve District were up 1 percent in the second quarter this year, from August 2017.

Moreover, values for “good” agricultural land in the district increased 2 percent from the first quarter to the second quarter of 2018, the bank’s survey of 177 agricultural bankers indicated.

The Seventh District includes all of Iowa and most of Illinois, Indiana, Michigan and Wisconsin.

“Overall, district farmland values were steady in the first half of 2018, even amid ongoing trade disputes,” said David Oppedahl, Federal Reserve of Chicago senior business economist.

“About three-fourths of survey respondents expected district agricultural land values to be unchanged during the third quarter of 2018 (only 2 percent expected them to increase, while 22 percent expected a decrease). Thus, the near-term outlook for district farmland values appeared to be stable.”

Oppedahl said only Illinois exhibited signs of a year-over-year decrease in farmland values.

“District farmland values were up 2 percent in the second quarter of 2018 relative to the first quarter – the largest quarterly gain in four years,” he said. “Agricultural land values remained fairly steady, assisted by an upturn in corn and soybean prices for the second quarter of 2018 as a whole.

“However, corn and soybean prices dipped in June on account of a favorable start to the crop year, anticipated large ending stocks and tariffs on agricultural exports.”

Last month, the USDA estimated 2018’s harvest of corn for grain at 14.23 billion bushels, using long-term trend yields. Oppedahl said that would be the third-largest ever, just behind the harvests of the previous two years, with this year’s harvest of soybeans estimated at 4.31 billion bushels.

(The USDA raised its estimate of production on both crops earlier this month.)

“Accounting for the impacts of recent tariffs on exports, the USDA estimated price intervals for the 2018-19 crop year to be $3.30 to $4.30 per bushel for corn and $8 to $10.50 per bushel for soybeans,” Oppedahl said.

He said district farmland values were expected to be stable in the short term. “With 22 percent projecting agricultural land values to decrease and only 2 percent projecting them to increase, around three-quarters of responding bankers projected no change in them for the third quarter of 2018.”

In June, Farmers National Co. in Omaha, Neb., released its 2018 Regional Land Values Report. Sam Kain, its area sales manager for Iowa, said the state saw less farmland being sold last year than normal, which continues the trend down from the high number of transactions several years ago.

“Farmers National Company has seen another increase in its Iowa sales so far in 2018,” he said. “Our agents have marketed and sold 34 percent more farms and 63 percent more acres, to date, than last year.”

Roger Hayworth, Farmers National area sales manager in Lafayette, Ind., said the trend of less land on the market continues in the Eastern Corn Belt states of Illinois, Indiana, Ohio, Michigan, Missouri and Arkansas.

“The market is basically stable,” he said. “Except for Michigan, where Farmers National Company is in the process of selling 14,000 acres for one owner, overall, there is less land on the market than average.”

He said prices for good quality tillable acres are steady in most areas, with lower-quality land steady to slightly lower, as there is less demand for these farms. He is also seeing a slight switch from public auctions as the preferred method for selling a farm to having more private treaty listings, as buyers become more cautious in their land purchases, adding, “Our auctions have been successful over the past six months.”

He added those selling land at this time are predominantly trusts and beneficiaries, with farmers and local investors buying most of the good-quality cropland that comes up for sale.

“We believe land buyers are being more cautious right now in making large purchases, but in Michigan, Farmers National Company has experienced strong interest in the farms that we have sold to date,” he said.