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If you were looking for signs that the recession was starting to hit (hard) in rural America, here’s one for you: Land values dropped by 6 percent in Iowa during the last three months of 2008, according to the Federal Reserve Bank of Chicago. Dan Piller reports in the Des Moines Register than this was the first drop in farmland prices in a decade, but one that was expected after the precipitous drop in corn and soybean prices since last summer. The value of these crops has fallen by more than 50 percent.

Land values dropped across the Midwest — Illinois, Wisconsin, Indiana and Michigan. The fall in values was deepest in Iowa.

Economists expect that the decline in values will result in smaller capital investments by farmers. They’ll buy fewer pieces of new equipment, which will hurt manufacturing. (Deere & Co. is one of the largest manufacturers in Iowa.) Deere reports that it expects flat sales next year after big gains in 2008.

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