ECONOMIC SLUMP LOWERS FARM VALUES

(AP) -- Farmland values fell in the fourth quarter of 2008 in some Midwest and Western states amid weakening farm income and waning market demand. Farmland values peaked in September 2008 at historic highs, when adjusted for inflation, said Jason Henderson, the report’s author and an executive at the Federal Reserve’s Omaha branch reported late last week. “They have retrenched, but they still remain above a year ago,” Henderson said. According to the Federal Reserve’s report, non-irrigated cropland values slipped 2.8% below the previous quarter, irrigated cropland dipped 1.1% and ranchland values fell 1.7%. The largest quarterly decline was in Nebraska, where non-irrigated cropland values dropped 4.6%. Demand for farm loans also eased in the fourth quarter, particularly loans for real estate and capital purchases. Bankers expected increased demand for operating loans for both crop and livestock enterprises. More than a quarter of bankers surveyed told the Federal Reserve that they expect credit standards to tighten further in 2009.