Farmland values: Not falling but not accelerating as fast
Eighth Federal Reserve District—St. Louis
Softer farmland values are even more pronounced in the St. Louis District which encompasses parts of the Corn Belt and the Delta regions.
Economists surveyed 55 commercial bankers in the Eighth District and said, “Surprisingly, reported quality farmland, ranchland, or pastureland prices are down slightly relative to the prices indicated in the fourth quarter of 2012.
In this quarter’s survey, the reported value of quality farmland decreased by an average of 2.3 percent and that of ranchland or pastureland decreased by an average of 5.1 percent from last quarter.”
The economists at the St. Louis Fed say the bankers they surveyed still expect land values to continue rising, but those banker expectations for future land value increases have moderated somewhat. Apparently fewer commercial bankers believe land values will continue to climb over the next quarter. And they are “moderately tempering” their short term expectations for cash rents.
Tenth Federal Reserve District—Kansas City
Across the Western Corn Belt, Fed economists ventured into similar territory, comparing prior quarters that had much more rapid growth in land values. The Kansas City economists said, “Land values climbed further in the first quarter of 2013. District cropland values rose 20 percent and ranchland values rose 14 percent year-over-year, a modest slowdown compared with the first quarter of 2012.”
The Federal Reserve Bank surveys all found similarities in the trends of land values in their respective districts. While land values had not fallen, or were stable, they were all still rising, but at a lower rate. The commercial bankers reporting to the Fed still expect higher land values, but the rapid growth seen in the past 1-2 years has moderated and the rate of acceleration has slowed.
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