Market News & Headlines >> Plains Land Values Look Soft
The Kansas City Federal Reserve’s quarterly survey of 226 farm lenders indicates farmland values in the central and southern Plains held steady in the fourth quarter, but the bankers expect weakness ahead. Values rose about 1% in the fourth quarter, despite fewer farms for sale, and ranchland values actually fell below third-quarter values.
On a year-over-year basis, the gain was 9.2% on nonirrigated land, 7.4% on irrigated and 9.7% on ranchland. That sounds like a lot but it is the smallest increase in more than three years.
A growing number of bankers in the district, which covers Kansas, Missouri, Nebraska, Oklahoma, and the Mountain States, feel that farmland values have topped out and could drop. At the end of 2012, only 1% expected a decline; at the end of 2013, 16% did.
They also reported that after several years of steep increases, retinal rates for cropland barely held steady at the end of 2013, though ranchland rental rates rose better than 5%.