Scott Williams, swilliams@wolfrivermedia.com
Farmland values are heading downward in Wisconsin and are dropping even more significantly in a region that includes Shawano County, a new economic analysis has found.
The Federal Reserve Bank of Chicago reported that farmland in the Dairy State was down 2 percent during the second quarter of 2015, compared both with the first quarter and with the same period of 2014.
In a north-central region that includes Shawano County, farmland values were reported down 3 percent from the first quarter and down 4 percent from a year ago.
David Oppedahl, the senior business economist who wrote the report, said the Shawano region lacks the sort of large urban population centers where strengthening construction markets have fueled an economic recovery that benefits surrounding farmland owners.
Oppedahl also noted that lower farm commodity prices were hurting farmland values throughout the Midwest.
He offered encouragement for landowners in Shawano and the surrounding region, saying that they likely would share in the positive effects of an inevitable cyclical rebound for American agriculture.
“It might be a little bit more of a challenge for a while,” he said. “Farmland is an investment for the long term.”
The report of falling farmland values was not a surprise to Adam Kuczer, vice president of the Shawano County Farm Bureau and owner of an 800-acre farm near Pulaski in the town of Maple Grove.
Considering how milk and grain prices have been hurting this year, Kuczer said, it make sense that farmers are not shopping for real estate and that land values are on the decline. Like many other farmers, Kuczer said he is just hoping to break even this year in the current market conditions.
“Everybody is hanging on for a rough ride,” he said.
The Federal Reserve Bank analysis is based on a survey of more than 200 agricultural bankers throughout a region stretching from Wisconsin to Indiana and from Iowa to Michigan. In the Midwest sector as a whole, farmland values were reported down 1 percent from the first quarter and 3 percent from a year ago, also not as significant a decline as the Shawano area.
For Wisconsin, it was the first time since the first quarter of 2013 for a year-to-year quarterly drop in farmland values.
The survey found bankers not optimistic that land values would rebound during the third quarter of 2015.
According to the report, 59 percent of survey respondents predicted that farmland value would remain unchanged, 40 percent expected it to continue decreasing and only 1 percent said it would increase.
The report concluded: “The survey results, on the whole, indicated ongoing weakness in farmland values.”