Wednesday, August 17, 2011

Second Quarter Farmland Price Gains in Kansas, Missouri, Nebraska, Oklahoma, Colorado, Wyoming and New Mexico

Note that the following is taken from the 2nd Quarter 2011 Kansas City Fed Report. The Federal Reserve Bank of Kansas City includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and portions of western Missouri and northern New Mexico.

Farmland values rose further in the second quarter, although the pace of farmland value appreciation slowed. The value of nonirrigated and irrigated cropland in the District climbed 2.3 percent and 3.9 percent, respectively, above levels in the previous quarter to remain 20 percent above year-ago levels. District ranchland values edged up only 1.0 percent from the first to second quarter and held at 11 percent above year-ago levels. Noting the slowdown in value gains since the end of last year, three-quarters of survey respondents felt that farmland values would level off in the coming months.

Farmland value gains fluctuated across the District with disparate weather patterns. Plentiful rain and good growing conditions in Nebraska fueled the largest jump in second quarter cropland values with a 30-percent year-over-year price gain. In contrast, drought conditions in the southern Plains hurt wheat crop yields, prompted herd liquidations and restrained farmland value gains. Still, land lease revenues from energy exploration were expected to support farmland values in some of the drought-stricken areas, particularly in Oklahoma and the mountain states.

  • “No rain in our area, failed crops and high input prices will increase need for operating dollars.” – Central Oklahoma
  • “Farmers are holding back on capital purchases, price of crop inputs high, dry conditions increasing costs to cattlemen.” – Western Kansas
  • “Crop farmers are doing better as mountain snowmelt has kept irrigation water plentiful.” – Southeast Colorado
  • “Drought conditions on pastures are causing livestock to be sold.” – Southwest Kansas
  • “Most land sales are cash from outside buyers.” – Southeast Wyoming
To view the entire report go to Drought Wilts Farm Income by Jason Henderson.

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