News

Michigan farmland values relatively steady

An official with GreenStone Farm Credit Services says their latest land values report shows the market is readjusting to reflect lower commodity prices after a decade of record profitability.

“The corrections that we’ve seen in the Michigan market are very comparable to what we’ve seen in Illinois, Iowa, Minnesota and other parts of Wisconsin in the Midwest.”

Executive Vice President and Chief Credit Officer Paul Anderson tells Brownfield lower commodity prices over the past four years are weighing on land values across the Midwest.  “We are slightly surprised that the market correction has been this gradual, which is an indication of the financial strength of a lot of farmers.”

He says Michigan’s diverse land use is reflected with a nearly eight percent decrease in land values in the Northern Thumb of Michigan to an increase of more than six percent in the Southwest portion of the state.  “Good land is selling well, we are seeing a little bit of softening in what we call our lower quality soil profiles that are cropland.”

Anderson says lower milk prices and limited processing capacity has reduced dairy farm values by 5.5 percent in Michigan this past year which is slightly less than last year.  “Low milk prices at the mailbox are starting to be felt here in the value of some of these facilities when they go up for sale.”

He says land values for Greenstone’s coverage in northeast Wisconsin have been stable.

Anderson says climbing interest rates and falling commodity prices cap the value of land, and will continue to weigh on the market, but he expects prices to remain stable in the year ahead.

GreenStone Farm Credit Services manages about $8 billion in assets for farmers throughout Michigan and Wisconsin.

AUDIO: Interview with Paul Anderson