In this post, I have excerpted key findings from the Tenth District Credit Conditions Federal Reserve Bank of Kansas City Agricultural Survey's 3rd Quarter 2011 report by Jason Henderson and Maria Akers. [Note that the Tenth Federal Reserve District includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico and the western third of Missouri.]
Banker Comments from the Tenth District:
To view the entire report, go here [pdf].
- District cropland values rose more than 25 percent over the past year, and ranchland values increased 14 percent.
- Nebraska posted the strongest gains with irrigated and nonirrigated land values rising approximately 40 percent above year-ago levels.
- Mirroring movements in land values, cash rental rates also rose compared to last year and were up 15 percent for nonirrigated and 21 percent for irrigated acreage in the District.
* Percent changes are calculated using responses only from those banks reporting in
both the past and the current quarter.
both the past and the current quarter.
- Operating loan demand remained weak in all District states and bankers reported that fewer farmers were upgrading machinery and equipment.
- For new farmland purchases, bankers continued to report that cash down payments averaged 20 percent of the purchase price, pledges of existing equity accounted for another 30 percent and the remaining 50 percent was financed with new debt.
- Robust livestock demand also helped underpin District farm income expectations.
- The rise in production costs slowed somewhat with the recent retreat in crop and energy prices, reducing input costs.
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Banker Comments from the Tenth District:
“Most farmland is being bought by large farmers paying cash.” —Northeast Nebraska
“Very little farm ground has been put up for sale in the past three months —Southeast Nebraska
To view the entire report, go here [pdf].