The latest update on farmland values across the Central and Southern Plains found the annual rate of decline in value in the second quarter was relatively small for all land types, notes the Federal Reserve Bank of Kansas City. The value of irrigated cropland decreased most significantly, the bank notes, declining about 4% from a year ago. Ranchland values also edged lower, but at the slowest rate since early 2016. The year-over-year decline in the value of non-irrigated cropland was the smallest since early 2015, a time when values for all land types began to decrease from historical highs.
Despite relatively limited declines in farmland values across the district as a whole, changes varied across states. Second-quarter changes in farmland values were most significant in Nebraska but, even there, the declines remained relatively modest. Nebraska notes a 2% decline in the value of dryland cropland, a 4% decrease in irrigated cropland but a 6% gain in the value of pasture and ranchland, the bank notes. Bankers in Kansas reported a 4% decrease in non-irrigated cropland, a 1% slip in irrigated cropland and a 3% decline in pasture/ranchland. Oklahoma reports gains of 2% for dryland cropland, 4% for irrigated cropland and 6% for pasture/ranchland. "The variation likely was influenced by differences in major commodity concentrations with the slump in corn and soybean prices likely placing pressure on values in Nebraska and strong cotton markets providing some support for increases in Oklahoma," the bank states.
Western Missouri notes a 3% annual gain in cropland values but a 3% decrease in pasture/ranchland values. The Mountain States of Colorado, Northern New Mexico and Wyoming lists a 2% rise in dryland cropland values, a 4% decline in irrigated cropland values and a 6% increase in ranchland values.
Despite further decreases in farm income, cash rents in the second quarter also declined at a relatively modest pace. Following a three-quarter trend of modest increases, cash rent for ranchland decreased about 3% due, in part, to a decline in cattle prices, the bank says.