Despite a continuing decline in farm financial conditions, non-irrigated cropland values eased a slim 1.6% and irrigated cropland declined 2.2% on an annual basis through the third quarter of 2018, reports the Federal Reserve Bank of Kansas City. The bank reports ranchland values rose 2.4% on an annual basis. The survey of ag bankers from Nebraska to Oklahoma and western Missouri to Colorado and Wyoming found respondents expecting farmland values to decline again in the fourth quarter.
The survey also found 85% of bankers expect some of their farm borrowers will sell mid- to long-term assets by year end to pay down debt and boost working capital. Nearly 20% of respondents said 10% or more of their farm borrowers were planning on selling mid- to long-term assets by year end.
The survey also found cash rents decreased only modestly versus a year ago and appear to stabilize in recent quarters. The bank notes cash rents for ranchland increased almost 5% from a year ago. In addition, cash rents for irrigated farmland fell at the slowest pace since 2013 and the downward trend in non-irrigated farmland rents remained modest.