The surprisingly steady land market provides emerging optimism for the dairy market. According to the data from the Federal Reserve Bank land values have held up well in 2018 across most of the central United States . . . including the Midwest, the Corn Belt, and the Northern Plains.

In Wisconsin, the data from the State Department of Revenue is pointing at higher average values in 2018 compared to 2017. That might be surprising for some, encouraging for others, or maybe both.

One note of caution, however, comes from the decline in the number of land transactions and the total number of acres transferred in 2018 compared to previous years. A lower number of transactions can sometimes be a sign of growing discrepancy between buyers and sellers, resulting in more sellers holding out. This can, in turn, lead to a softer market in subsequent years. That is part of the reason why I’m talking about cautious optimism.

Federal Reserve data released earlier this month for the first quarter of 2019 indicates steady land value for Illinois and Iowa and the entire Tenth District that includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, along with parts of Missouri and New Mexico. On the flip side, the data also suggests a decline in value for Wisconsin in early 2019.

We can only hope that the optimism regarding dairy markets materializes. And, although credit conditions for most dairy producers are already tight, we can expect interest rates to hold steady and avoid a further tightening of credit.