Plagued for years with disease-ridden crops and now facing near-record low prices, many wheat farmers in the upper Midwest are putting their farms up for sale.

As a result, land values in parts of Minnesota, the Dakotas, and Iowa have plunged to 10-year lows, forcing many bankers to require more collateral from farm borrowers.

A third-quarter survey of agricultural banks by the Federal Reserve Bank of Minneapolis indicates that a glut in available farm land pushed prices down by 3% to 15% from the second quarter to the third.

And with land prices falling, about 21% of the district's bankers said they would require more collateral for loans than they did a year earlier. Among those banks seeking more collateral, 41% said their borrowers were at their debt limit-up from 27% in the second quarter-the survey showed.

Edward Lotterman, an agricultural economist with the Minneapolis Fed, said this year's wheat crop has been relatively free of the disease- fusarium head blight, commonly called scab.

However, he said, farmers are being driven to sell now by low global commodity prices and the fear that scab will return with the next rainy summer. Indeed, local plant pathologists say that scab-which first struck the upper Midwest six years ago-will probably recur as long as wheat is grown there.

"They've had repeated years of disease," Mr. Lotterman said. "Some farmers just don't want to continue."

Anxiety among farmers in the region is high. Michael Winkel, chief operating officer at First National Bank North Dakota in Grand Forks, said he has heard estimates that as many as a third of the area's farmers will sell their property over the next five years. Upcoming farm sales may show that land values have decreased by as much as 10%, he said.

"Even though the crops were healthy this year, people are beginning to believe the pricing of wheat will never come up enough to make it worth it," Mr. Winkel said.

He also said some farmers are delaying putting their property on the market because there's little demand.

Still, Mr. Winkel hopes the impact on the bank will be minimal. After all, any new property owner will need the services of a local bank.

"That land is still going to be farmed whether it's by a family farmer or someone else," such as a large cooperative or a tenant farmer, Mr. Winkel said.

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