Continuing a four-year trend, land values rose during the growing season in the northern Plains, despite financial tightening in the farm sector, said ag bankers in a quarterly survey by the Minneapolis Federal Reserve Bank. Rangeland and irrigated cropland values rose 13 percent during the second quarter and non-irrigated cropland values rose 3 percent, according to the lenders.
More than three-quarters of the bankers said farm income was lower during the second quarter of this year than in the same period in 2023. And 78 percent said they expected farm income to decline in the third quarter. “With declining grain prices and a poor crop in the field, 2024 is shaping up to be a below-average year,” said a Minnesota banker.
“Owing to a prolonged decline in incomes and elevated operating costs, demand for credit increased in the second quarter,” said the Minneapolis Fed. Interest rates on operating, machinery, and real estate loans increased slightly in the second quarter, but most bankers said they had not changed the collateral required on a loan.
The Minneapolis Federal Reserve district covers Montana, South Dakota, North Dakota, Minnesota, northern Wisconsin, and the Upper Peninsula of Michigan.