Despite declining farm incomes, farm and pastureland values posted strong gains through the end of 2017, reports the Federal Reserve Bank of St. Louis. It's quarterly survey of ag bankers found quality farmland rose 5% on an annual basis through the fourth quarter of 2017. It also reports the value of ranch/pastureland surged 15%, the sharpest increase in the brief history of the quarterly survey.
The gains seen in the fourth quarter compare to a 1% annual boost in the value of farmland noted in the third quarter of 2017 and a 4% increase in the value of ranch/pastureland. Looking ahead, bankers expect farmland and pastureland values will remain steady through the first quarter of 2018.
Cash rents rose, as well, according to the survey. Cash rent on quality farmland rose 4% annually through the final quarter of 2017. Cash rent for pastureland rose a strong 10%. Looking ahead, bankers expect cash rents to decline in the first quarter of 2018.