Previous studies provide conflicting evidence on the degree to which Federal Reserve surveys of agricultural bankers provide useful information on the future direction of farm real estate values. We use unbalanced panel of responses from the Federal Reserve Bank of Chicago’s Land Values and Credit Conditions Survey between 1993Q1 and 2019Q2 to empirically test adaptive, rational and extrapolative expectations. We find that respondents extrapolate recent farmland price experiences but are overly cautious, as observed farmland price changes tend to be greater than expected. This is the first study of individual farmland price expectations collected by Federal Reserve surveys of agricultural bankers.

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, the Chicago Fed held a conference to examine environmental issues related to Midwest agriculture, with a particular focus on conservation practices. Experts from academia, the farming and food industries, and policy institutions gathered to discuss how to keep the region's farms economically viable while improving the sustainability of its natural resources. The goals of the conference included understanding the impacts of agricultural and conservation practices on public health and air, land, and water quality; exploring farming policies that affect natural resources; and examining how environmental considerations may affect the financing and sustainability of agriculture, which has generally been less profitable in recent years. The day began with opening remarks from Rick Mattoon (Federal Reserve Bank of Chicago)-who noted that academic and policy researchers, insurance firms, and credit rating agencies are all increasingly concerned with identifying and measuring the impact of climate change on the economy. He acknowledged that environmentally beneficial practices-many of which are associated with "precision agriculture" 1-may be challenging for some farmers to adopt during this period of lower profits. Still, he said, events like this one could help farmers in the Seventh Federal Reserve District 2 and elsewhere identify common goals and potential support in the private, public, and nonprofit sectors. Achieving better environmental outcomes and financial results for Midwest farms Robert Johansson, chief economist at the U.S. Department of Agriculture (USDA), provided the keynote address, which focused on ways to enhance Midwest farms' financial performance while also reducing their negative effects on the environment. To provide more context for his remarks, he shared that per the USDA's forecast, real net farm income is projected to drift lower over the next decade. Moreover, crop production in 2019 was stressful for farmers on account of tough weather conditions. So, given the difficult economic circumstances facing farmers, why should they care about conservation? First, he answered, cleaner air, land, and water benefit farmers; their crops and livestock; their communities; and those who visit the countryside for recreation and spend money in rural economies. Second, he contended, it is incorrect to assume that farms cannot improve their financial performance while also limiting or reducing their negative environmental impacts. Indeed, he asserted, the farms that increase their productivity with technological innovations over time will also be the ones that minimize such impacts. Johansson pointed out the dramatic increase

PurposeThis study examines agricultural lending by commercial banks and the competition they face from the Farm Credit System (FCS) and non-traditional lenders, including merchants, dealers and other input suppliers.Design/methodology/approachWe construct a measure of commercial banks' perceived competition with FCS or non-traditional lenders using the individual responses to the Federal Reserve Bank of Chicago's Land Values and Credit Conditions Survey between 1999 and 2019. Through regression analysis of an unbalanced panel of survey responses, we present a number of stylized facts on the relationship between perceived competition and farm loan rate spreads, collateral requirements, loan delinquencies and expected lending volumes.FindingsOur analysis shows that the two sources of competition have very different effects on commercial bank lending terms, loan portfolio riskiness and expected loan volumes. With these results in mind, we offer a number of suggestions for future research.Originality/valueWe leverage the unique characteristics of the Land Values and Credit Conditions Survey to examine the competition with non-traditional lenders that cannot be observed using administrative data.

, the Federal Reserve Bank of Chicago held a conference to explore the opportunities and challenges presented by new technologies to farms and rural areas in the Midwest and other parts of the U.S. Experts from academia, industry, and policy institutions gathered to discuss how technological advances have reshaped the rural economy and how they may affect its future.