The pace of growth in US farmland prices slowed dramatically in the second quarter, with expectations for further increases dropping too, as drought bit into farmers' incomes, central bank data show.
In the Midwest, quarter-on-quarter price growth in Iowa, the top corn and soybean growing state, slowed to 2%, half the rate of increase in the January-to-March period, Federal Reserve data showed.
In next-door Illinois, the second-biggest corn and soybean state, where drought has struck particularly hard, appreciation slumped to 1% from 8%.
Meanwhile, heading further west and south into the High Plains, and an area covering Kansas, the top wheat-growing state, Missouri, Nebraska and Oklahoma, growth slowed to less than 3%, less than half that of the previous period.
The data still show historically strong growth in prices especially at an annual level, with Nebraska values, for instance, soaring 35% year on year.
"However, annual farmland value gains in Nebraska were beginning to slow with less rapid land value growth during the second quarter," Fed officials said, following banker surveys.
For more, see: Gains in farmland prices slow as drought bites