Farmland values continue to climb in the two Federal Reserve Bank districts that contain most of the Midwest, reports Jeff Caldwell of Agriculture.com. According to Federal Reserve economist David Oppendahl and Omaha branch executive Jason Henderson, land values rose 25 percent in the Chicago and Kansas districts. Caldwell reports that's a one-year record for both regions, and that values have much to do with mother nature, stating land in states hit hard by drought this year did not increase in value. Agriculture bankers say this trend "has yet to peak," the bankers write.
Oppendahl told Caldwell "interest rates on farm operating and real estate loans declined" in the third quarter of 2011, adding the "availability of funds at District banks is at it's highest level in 24 years." Caldwell reports: "Nebraska and Iowa saw the highest year-over-year increases in crop land values at 38 percent (41 percent for irrigated ground) and 31 percent, respectively." Henderson said the limited number of farms for sale during growing season creates strong competition which bids up sale prices at public auctions. Bankers report cash down payments for land averaged 20 percent of the purchase price.
Oppendahl said there will be a lot of "bullish sentiment for farm incomes and land values" in the next year in the Chicago district, and Henderson said weather would be a major factor in how land prices are determined next year, "especially where this year's drought was most severe." They also said the costs of raising next year's crops will rise, creating higher expected operating loan volume. (Read more)
Oppendahl told Caldwell "interest rates on farm operating and real estate loans declined" in the third quarter of 2011, adding the "availability of funds at District banks is at it's highest level in 24 years." Caldwell reports: "Nebraska and Iowa saw the highest year-over-year increases in crop land values at 38 percent (41 percent for irrigated ground) and 31 percent, respectively." Henderson said the limited number of farms for sale during growing season creates strong competition which bids up sale prices at public auctions. Bankers report cash down payments for land averaged 20 percent of the purchase price.
Oppendahl said there will be a lot of "bullish sentiment for farm incomes and land values" in the next year in the Chicago district, and Henderson said weather would be a major factor in how land prices are determined next year, "especially where this year's drought was most severe." They also said the costs of raising next year's crops will rise, creating higher expected operating loan volume. (Read more)
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