– Farmland values in the Midwest jumped 15 percent in the first quarter from a year earlier as demand for acres increased amid rising rental rates, the Federal Reserve Bank of Chicago said.

Farmland cash-rentals in the Seventh Federal Reserve District that encompasses Iowa, Illinois, Indiana, Michigan and Wisconsin gained 11 percent, the Chicago Fed said in a report.

Farmland values rose 4 percent in the first quarter from the prior three months. About 59 percent of bankers in a survey conducted by the agency said they'd observed stronger demand for farmland, the report said.

"Good-farmland values kept rising during the first quarter of 2013," wrote economist David Oppedahl, the author of the report. "Demand to purchase agricultural land increased in the three-to-six-month period ending with March 2013 compared with the same period a year ago."

Farmland values in Michigan led the gains, surging 24 percent, according to the report. Values in Iowa, the biggest U.S. producer of corn and soybeans, rose 20 percent, Illinois land gained 19 percent and Indiana increased 15 percent. Wisconsin values dropped 3 percent.

Land in southwestern Illinois rose the most, jumping 31 percent, according to the report. Values in southern Iowa gained 27 percent, while land in northern Wisconsin dropped the most, declining 6 percent this year.

Credit availability improved in the region with 61 percent of survey respondents saying their banks had more funds to lend, Oppedahl wrote. About 47 percent of bankers surveyed reported higher repayment, while 4 percent said rates were lower. Land values could decline as grain and oilseed prices are expected to fall this year, the Fed said.

Rain that has delayed planting this spring revitalized subsoil moisture, curbing drought conditions in the region, Oppedahl said. Corn prices in the year that starts on Sept. 1 will average $4.30-$5.10 a bushel. That's down from a Department of Agriculture forecast for $6.70-$7.10 in the prior season.