Tenth District farmland values surged to a record high in the third quarter, with stronger gains in the northern Plains, according to the Federal Reserve Bank of Kansas City's quarterly Survey of Agricultural Credit Conditions.
District cropland values rose more than 25 percent over the past year, and ranchland values increased 14 percent. A quarter of the 243 survey respondents felt that cropland values had yet to peak.
Nebraska posted the strongest gains with irrigated and nonirrigated land values rising approximately 40 percent above year-ago levels. Record gains in the northern Plains were fueled by another bumper crop this harvest season that raised farm income expectations despite the recent slide in crop prices.
In the southern Plains, weaker farm income limited farmland values gains. Severe drought struck Oklahoma and areas of Kansas, Missouri and Colorado, stressing crops and drying out pastures. Reduced yields cut farm incomes and drove an increase in crop insurance claims. In addition, poor grazing prompted livestock operators to relocate herds or liquidate.
Despite variable farm income, Tenth District agricultural credit conditions held relatively steady in the third quarter. Loan repayment rates remained strong with fewer requests for loan renewals and extensions. Interest rates for farm operating and real estate loans reached new survey lows.
The complete survey is available at www.KansasCityFed.org/agcrsurv/agcrmain.htm