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Land prices steady to higher in Midwest

CHICAGO — Farmland prices in the U.S. Plains and Corn Belt states were steady to higher in the second quarter despite lower grain profits as crop prices fell, according to Federal Reserve Bank quarterly surveys issued on Thursday.

Falling corn, soybean and wheat prices cut into crop farmers’ profits while the livestock sector benefited from cheaper feed costs.

Along with lower incomes, bankers noted a sharp rise in loan demand, but overall credit conditions remained strong, the banks said.

The Fed’s Chicago district, which stretches from Iowa to Michigan, is the top corn, soybean and hog producing area of the United States.

Farmland prices are closely watched by Fed policymakers, ag lenders and farm suppliers — from equipment makers to seed dealers — since land is the basic collateral for most farm loans.

In recent years, crop and farmland prices have set records as a boom in biofuels and exports fueled demand.