Tag Archives: prices
Farmland Values in U.S. Rise 9.4% to $2,900 Per Acre
By Alan Bjerga – Aug 2, 2013 U.S. farmland values climbed 9.4 percent this year as high prices paid for crops and livestock after last year’s drought bolstered real-estate while commodity prices fell, the Department of Agriculture said. The average value of all land and buildings on farms and ranches in the 48 contiguous states was $2,900 an acre, according to a June survey of farmers, the USDA today said in an annual report , up from $2,650 a year earlier. The drought that spread through the Corn Belt and Great Plains last year prompted record insurance payments and will push farm profits to a record $128.2 billion this year as growers rebuild inventories, the USDA said in February. The most expensive farmland was in New Jersey at $12,700 an acre, followed by Rhode Island at $11,800, according to the USDA. The cheapest was in New Mexico at $550 an acre. The Corn Belt was the most expensive of the 10 regions tracked by the USDA, averaging $6,400 an acre after gaining 15 percent from the previous year. The Mountain region had the lowest prices, averaging $1,020 per acre. The USDA will update its farm profit forecast on Aug. 27. To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net Continue reading
Forest2Market Reports 2Q2013 Delivered Wood Fiber Prices For The Midwest
Aspen prices remained steady before ending the quarter on an upswing. Hardwood and softwood prices saw significant increases before tapering off to typical levels; average fuelwood prices steadily increased over the past three quarters. Midwest Delivered Price Benchmark shows average prices for aspen remained relatively steady throughout the second quarter of 2013. Hardwood and softwood prices were more volatile, displaying steep increases between the close of the first and the start of the second quarter. Residual chip pricing, both hardwood and softwood, has shown little volatility over the last nine months. Aspen pulpwood prices remained relatively constant throughout the quarter, starting at $41.03 per ton in April before dropping to $40.91 per ton in May. Aspen closed the quarter at a high of $41.57 per ton in June. Average hardwood pulpwood prices increased $4.68 per ton from March ($44.29 per ton) to April ($48.97 per ton). The spike was largely due to increased woodyard transfers and hauling from piledown areas as spring breakup came into full swing. Hardwood pulpwood prices fell to $46.70 per ton in May, and were back in line with winter price levels by June ($45.06 per ton). Softwood pulpwood prices also increased at the start of the spring season, coming in at a quarterly high of $49.03 in April (prices averaged $47.84 per ton in March). Prices then fell five percent over the quarter to $47.65 in May and $46.48 in June. The end of seasonal road restrictions and increased supply are expected to help moderate prices throughout the summer months. Peter Coutu , Forest2Market’s Business Lead for the Midwest and Northeast regions, noted the delivered price reports have added a degree of transparency previously absent in the Midwest market. “At Forest2Market, we strive to provide our customers with the information they need to make better-informed decisions and improve business performance. Since its introduction to the Midwest in the fourth quarter of 2012, the Delivered Price Benchmark has helped subscribers identify significant opportunities for adding value to their wood fiber supply chain.” In addition to aspen, hardwood and softwood delivered prices, the benchmark reports fuelwood pricing. Average prices for biomass have displayed a slow but steady increase since 4Q2012, the first quarter Forest2Market introduced its delivered price benchmark to the Midwest. Overall, the per ton average price for biomass increased $1.16, from $26.34 in Q4 2012 to $27.50 in Q2 2013. The increase is attributed to rising competition for raw material and seasonal factors. Forest2Market Delivered Price Benchmarks Forest2Market launched its Delivered Price Benchmark service for the Midwest in 2012. The report provides quarterly price information based on transaction-level data for aspen, hardwood, softwood and fuelwood. Forest2Market has provided its delivered price benchmark service in the US South since 2006 and the Pacific Northwest since 2007. About Forest2Market Forest2Market provides market pricing data as well as wood and fiber supply chain expertise to customers in the forest, wood and paper products, recovered fiber and bioenergy industries. Headquartered in Charlotte, North Carolina, the company also has offices in Eugene, Oregon and Appleton, Wisconsin. For more information, visit http://www.forest2market.com . ### Continue reading
As Home Prices Rebound, Farmland Gets Riskier: Kleintop
At a time when the housing market is showing double-digit price increases for April, fears are high that the strongest segment of the economy will hit a turbulent patch once the impact of higher borrowing costs begins to filter through the numbers sometime this August. And according to Jeff Kleintop , chief market strategist at LPL Financial, forget about condos in Phoenix, farmland in the corn-belt is where the new risk lies. “Ten years ago you could buy an acre of Iowa farmland from around $1,000,” Kleintop says in the attached video. “Last year, that went for $8,000,” he says, pointing out that some recent sales fetched as much as $15,000 per acre. While he’s the first to acknowledge that farmland is in no way comparable to the size and scope of the housing crisis, he says there’s more going on than just rising rates. “It has to do with Emerging Market demand for more food,” he says. “Very, very low interest rates have allowed these prices to soar.” Add in a wet planting season and the fact that grain prices have actually moved lower over the past year, and Kleintop says “farmers are in the position where finances are a little bit tight.” In as much as mortgage lenders Fannie Mae and Freddie Mac are dependent upon steady employment, he says the U.S. Farm Credit System is dependent upon a good harvest. Kleintop adds, “If we see these rates continue to rise a little bit in an environment where farmers simply don’t have the income to make payments, you could see a minor financial problem develop, particularly amongst Midwestern lenders with ties to farmland.” For now, he says it is something that investors should “keep a close eye on” and be on the lookout for any signs of stress in the financial system, such as increases in overnight lending rates. As for those individual investors who were fortunate enough to ride the wave of rising farm prices over the past five, 10 or even 20 years, Kleintop says, “they may also see some losses after years of gains.” Continue reading
