For the first time in almost three years, the value of farmland in Wisconsin has fallen: According to a survey from the Federal Reserve Bank of Chicago, there was a 2 percent dip between April and June.
David Oppedahl, an economist with the reserve bank, said it all comes down to long-term supply and demand.
“We’ve seen now in the last few years where corn and soybean prices are dropping, and several other key commodities like milk also being down,” he said. “These kinds of expectations get built into what farmers and other investors think about the value of the farmland going ahead.”
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For the past 10 years, farmland prices in Wisconsin were steadily on the rise, and farm values were actually up in the beginning of 2015, during the first quarter of the year.
Oppedahl said the effects of falling commodity prices are being felt by farms throughout the region. Wisconsin is the latest state to be hit by the dip in land value.
“This is a region-wide phenomenon. When you look at states like Iowa and Illinois and Indiana, they’ve had decreases varying across them over a longer period of time,” he said, adding that rising global demand for food may boost farmland values in the long run.
Last month, the U.S. Department of Agriculture released numbers showing that the average value of an acre of agricultural land in Wisconsin was up nearly 7 percent from August 2014.
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