Farmland values have fallen sharply in parts of America’s heartland, reports The Wall Street Journal. The Federal Reserve Bank of Chicago cites the recent period as the sharpest drop in Midwestern cropland values in almost three decades. Over the past two years, farm incomes have steadily declined. Investors who had piled into the asset a few years ago have begun to retreat. As a result, low prices are weighing down land values from Kansas to Indiana.
Federal Reserve banks say they expect land values to continue to drop, though their forecasts were based on surveys taken before the recent rally in corn and soybean prices. Declines in the Kansas City Fed’s district, which includes Kansas and Nebraska, were less pronounced than in the Midwest. But the bank said prices for nonirrigated cropland on the plains fell 4% in the quarter.
The strength of the US dollar is one culprit, lowering overseas demand for American commodities.