Tag Archives: federal-reserve
Farm Land Values Still On The Rise
By Todd C. Elliott todd.elliott@eunicetoday.com Louisiana is following the trend up when it comes to farm land values. Mike Strain, commissioner of agriculture and forestry, said that soaring land values determined by a survey conducted by the Federal Reserve’s Eighth District of its members’ agricultural lenders should mirror Louisiana’s quality farmland value with an increase in value for the third quarter of 2013. “Louisiana land values are following the trend,” said Strain, citing a Delta Farm Press article on how farmland values rose in the second quarter of 2013. “In the next 50 years, we will need every acre available for agriculture. It will be far more economically viable as productive farmland (instead of being developed into something else). Just look at the prices of farm land today. From 6-20 thousand dollars an acre already.” According to the Agricultural Finance Monitor – which is a published report from the Federal Reserve Bank of St. Louis – quality farmland prices average $5,672 per acre in the second quarter of 2013 in that district. The latest average shows a value growth of more than 20 percent since the start of 2013. Strain said that even though Louisiana is listed in the Federal Reserve’s Eleventh District and the Federal Reserve’s Sixth District, the findings and speculations of the Eight District – which is the Midwest states including Arkansas and parts of Mississippi, Tennessee, Kentucky and Missouri – should ring true for Louisiana. “With rising farm values, both in crop value and net farm equity, further reflected in the value of land, what we now see is an ever-increasing desire to hold onto the land and increase production,” said Strain. “Furthermore, I believe land values will continue to increase relative to the value of its agricultural productivity.” Whether land is more valuable in its traditional agricultural use or in development for housing or other enterprises is a question owners will continue to wrestle with. According to recently published statistics from the Farmland Information Center website, Louisiana is seeing a rise in farms state wide. In 1997, there were 30,425 farms in the state. It dropped to 27,413 in 2002 only to rise to 30,106 farms reported in 2007. With the number of rising farm totals, there is a rise in the number of farm acreage, according to farmlandinfo.org. Much like the statistics for the number of farms, Louisiana farms saw a total of more than 8.3 million acres in 1997– which saw a dip to nearly 7.8 million acres in 2002 before rising to more than 8.1 million acres reported in 2007. The bottom line value of the land and the farms saw a significant increase in the amount of Louisiana agricultural products sold. With more than $2.1 billion in agricultural products reported sold in 1997, the 2002 numbers drop to more than $1.8 billion before climbing to more than $2.6 billion reported in 2007. Read more: EuniceToday.com – Farm land values still on the rise 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
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