Tag Archives: prices
Scottish Farmland Prices At Record High, Surveyors Report
23 August 2013 Scottish farmland prices at record high, surveyors report Surveyors say the average price of farmland has trebled within a decade The price of farmland in Scotland hit a record high in the first half of 2013, according to research by surveyors. The Land Market Survey by the Royal Institution of Chartered Surveyors (RICS) indicated land values had trebled in less than a decade. It calculated the average price of land in Scotland was now £4,438 per acre. Surveyors reported the price was being supported by demand from farmers and investors. Their report predicted further price increases were likely, with the market “far from finding its level”. Mark Mitchell, of Bell Ingram in Perth, said: “The Scottish farmland market has remained strong, despite the poor harvest of 2012 and late spring of 2013. “Quality farms in good locations will still sell quickly and well, bare land is still the most desirable commodity.” The survey also reported a slight increase in land being put on the market. RICS Scotland director Sarah Speirs said: “The growth in farmland prices in recent times has been nothing short of staggering.” She added that in less than 10 years the cost of farmland had grown to such an extent that investors, as well as farmers, were entering the market. “And, if commodity prices continue to increase and keep demand high, we may well see further increases,” she said. Continue reading
US Land Prices ‘Surge’ Despite Fall In Ag Profits
15 th Aug 2013, by Agrimoney.com Farmland prices in major US agricultural states defied weakening farm incomes to maintain strong gains – in some cases, accelerating – although many bankers feel they may now “have peaked”. Farmland prices in Plains states including Kansas, the top wheat-growing state, and Nebraska, a major corn and soybean producer “surged further” during the April-to-June quarter, the US central bank said. Prices of non-irrigated farms were 18.3% higher than a year before, with those of watered land soaring 25%, faster than the 21% growth recorded in the first three months of the year. “Despite expectations of weaker farm income, district farmland values continued to set records,” the Federal Reserve’s Kansas City bank said. The period “marks the ninth consecutive quarter in which irrigated cropland values have risen more than 20% year over year”, with lingering dryness in some area increasing the premium over land without access to water supplies. Weak income prospects The increase defied dents to farm income from weaker winter wheat yields and prices, and falling cattle values, “although an uptick in hog prices improved profitability for some hog producers”, the bank said. And prospects for farm takings remain “weak for the rest of the year throughout the district”, given weaker prices of corn and soybeans, harvested in the autumn. “Not only would lower crop prices reduce farm income, but persistent drought in parts of the district could limit yield potential, particularly in areas without irrigation,” the Fed said. “With lower expected prices and the possibility of a poor harvest,” lenders contacted for the Fed survey “expected farm income to be less than last year in each state in the district”, which also includes Colorado, Missouri, New Mexico and Wyoming. ‘Overall wealth’ However, it was a dearth of other investment opportunities, for farmers enriched by a strong period for farm incomes, rather than hopes for agricultural returns which was incentivising land purchases “Bankers indicated that expected farm income was not the main factor contributing to the value of farmland,” the Fed said. “Instead, bankers cited the overall wealth level of the farm sector, supported by several years of strong income, as the primary driver of farmland values. “Low interest rates and a lack of alternative investment options were also noted as significant factors.” Price forecasts Nonetheless, lenders expressed doubts as to how long this effect might last in the face of weakened revenue prospects. “While most bankers expected farmland values to remain at current levels, an increasing number of respondents felt farmland values may have peaked,” the fed said. “More bankers also expected farmland values to drop after harvest likely due, at least partially, to expectations of lower farm income,” although the decline was expected to be less than 10% over the next year. Weaker farm prosperity has already become evident in farm credit markets, with loan demand rising for the first time in three years, and repayment rates on borrowings weakening too, and expected to keep falling. The data follow a debate at an investor call by Deere & Co on Wednesday at which analysts persistently questioned forecasts by the tractor maker that cash farm receipts, a key indicator of machinery purchases, will fall only slightly in 2014, despite tumbling crop prices. Continue reading
Fed Says Some U.S. Farmland Values Surge More Than 25 Percent
Carey Gillam, Reuters | August 16, 2013 KANSAS CITY, Mo. – Farmland prices in key U.S. crop regions surged more than 25 percent over the past 12 months as demand for land remains strong despite a decline in farm income, two Federal Reserve bank reports said on Thursday. Prices paid for irrigated cropland in a central U.S. region that includes Kansas, Nebraska, Missouri, and Oklahoma jumped 25.2 percent from a year ago, according to a report by the Federal Reserve Bank of Kansas City. The jump marks the ninth consecutive quarter in which irrigated cropland values have risen more than 20 percent year-on-year. Non-irrigated cropland rose 18 percent on a year ago, while ranchland rose 14 percent, the report said. Gains were weaker for ranchland, particularly in Oklahoma and some mountain states, because persistent drought has left pastures in poor condition. In the Midwest and in some Mid-South states including Arkansas and parts of Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois, prices paid for quality farmland rose 20.6 percent over the last year to $5,672 per acre on average, according to a report by the Federal Reserve Bank of St. Louis. However, average ranch or pastureland values for the Midwest and Mid-South district increased only about 1 percent to $2,372 per acre over the past year, the report said. The gains come even as farm income in many states is declining, in part due to reduced wheat production revenues and losses in the cattle sector, according to the Kansas City report. The reports are based on surveys of bankers, who pointed to the overall wealth of the farm sector, the current low interest rate environment and a lack of alternative investment options for the price rises. Still, there is a growing sense that values are nearing, or have reached, a peak. While most bankers expected farmland values to remain at current levels, an increasing number of bankers responding to a survey by the Federal Reserve Bank of Kansas City felt farmland values may have peaked. Compared with previous surveys, fewer bankers expected farmland values to keep rising. Among those expecting values to fall, most thought the decline would be less than 10 percent, the Kansas City report said. The Kansas City federal reserve district encompasses key wheat-producing states and largecattle and livestock production areas, while the Chicago district is dominated by corn and soybean farms, as well as large hog and dairy operations. Continue reading
