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• ecirReserve Bank. of Chicago Fellrer— - Itur fiC October 19, 1956 Farm land values increased during the past year in most Midwest areas according to current reports from country bankers. Most of the rise has taken place during the past six months, as similar reports last winter and spring indicated that farm land values had stabilized or were edging down in many areas. tter In the Corn Belt the recent rise is centered in the cash grain areas of east central Illinois and in other areas where record crops are being harvested. In the central Illinois area two-fifths of the reporting bankers indicated that the current trend in farm land values is upward and the remaining 60 per cent reported no change. Number 375 lesser extent in Wisconsin and northern Indiana, is traced largely to the demand for land by part-time farmers and for urban and industrial development. However, in both Michigan and Wisconsin many bankers reported that higher milk prices and better crops than a year ago have strengthened the financial position of farmers. "Excellent 1956 harvests of corn and soybeans" were frequently mentioned as causing the increase along with the improved cattle and hog prices. The $1.25 per bushel price support on corn for those who did not plant within their allotments also appears to be an important factor in farmers' expectations of substantially higher incomes than a year ago when prices dropped to around $1 at harvesttime. Farm transfers continue at a low volume according to reports from bankers, making it difficult to judge market values, particularly in areas where a large portion of the purchases are for nonfarm use. In all areas purchases to nlarge existing holdings are an important factor ii the market. These sales usually command a igh .rice. The demand for land for this purrelati ky ) AlAii\obabl emain active as farmers continue their or4 lo'expand*u ut and reduce costs. Largely due to continued drouth, a further decline in land values was reported in western Iowa. r) ) 0< The increase in land values in Michigan, and to Research Department ) 9 Value of good farms TOP: BOTTOM: ():* Average dollar value per acre, October 1, 95* Per cent change—October 1, 1955 to OctobeN 195V (based on reports of identical banks) XIII $88 +3 VII $210 XII $349 +1 $299 $213 +4 $235 +5 -.4 $303 +7 VIII $314 0 X IX XI III Figures not included due tc limited number of vepotts. Illinois Indiana Iowa Michigan Wisconsin SEVENTH DISTRICT XIV Per cent change October 1, 1955 to October 1, 1956 +3 +2 +2 +4 +1 +2 $420 +2 $41./ $465 +5 XV $269 +2 XV I $353 +2 X VI I • $168 0