Better crop prospects have, combined with record low interest rates, shielded the Midwest agriculture from the "wilted" farm income prospects further south, helping farmland prices soar at their fastest pace in more than 30 years.
Farm values in states including Illinois, Indiana and Iowa were 17% higher in the April-to-June quarter than a year before, the fastest "since the 1970s", a report from central bankers said.
The rise was attributed to interest rates which, for loans backed by property, fell to 5.62%, down from 7.8% five years earlier.
"These record low mortgage rates contributed to the surge this year in… farmland values," the briefing, from Federal Reserve system’s Chicago bank, said.
The market was also boosted by the prospect of farm incomes swollen by elevated crop and livestock prices, and expectations of stronger harvests.
Corn production in the district is expected to rise by 7.0%, nearly twice the national average.
"The combination of higher revenues for crop and livestock production has been an impetus for the significant increases in land values seen this year," the report said.
North vs South
The report tallies with anecdotal evidence reported to Agrimoney.com, with Mike Mawdsley at Iowa-based Market 1 noting that a farm in the north west of the state sold last weekend for $14,350 an acre.
However, it contrasts with the softening market further south, in a region including states such as drought-struck Oklahoma, where the Fed’s Kansas City bank highlighted that the "pace of farmland value appreciation slowed" as drought "wilted" farmers’ income expectations.
"In the southern Plains, farm income expectations wilted as drought cut… wheat production," the Kansas City bank said, reporting quarter-on-quarter growth in non-irrigated land of 2.3%, and of 1.0% in ranchland.
The Chicago fed reported quarter-on-quarter growth of 4% in what it termed "good" farmland.
Nonetheless, it added that more bankers in the region expected a stabilisation in values rather than further appreciation. Only 2% of bankers surveyed expected prices to drop.