Central Plains Farmland Values Surge 15%
Cropland and ranchland values across the Central Plains marked a strong 15% annual gain through third quarter of 2021, according to the Federal Reserve Bank of Kansas City.
Farm income and loan repayment rates continued to increase at a steady pace and contributed to multi-year lows in problem loans and asset liquidation, the bank states. “While conditions have improved substantially from recent years throughout the region, the pace of increase in farm income and loan repayment rates was slower in areas most significantly impacted by drought,” it comments.
The bank notes: “most lenders have remained optimistic about the outlook for agriculture in the district but have expressed concerns about rising input costs. Despite rising costs, however, elevated commodity prices have continued to support farm finances, particularly for crop producers. Though many risks remain,” the bank continues, “the agricultural sector will be well positioned heading into 2022 alongside the persistent strength in commodity prices and double-digit gains in land values.”
According to the survey, nonirrigated cropland values are up 14% versus a year ago, the largest increase since 2013. Irrigated cropland and ranchland values increased 16% and 17%, respectively – also the largest increase since 2013.
The strength in farm real estate values was consistent across all states in the bank’s district. Nonirrigated cropland increased more than 15% in western Missouri and Nebraska and slightly less than 10% in all other states. Ranchland values, meanwhile, posted 25% and 21% gains in western Missouri and Nebraska, while irrigated land values increased at the fastest pace in Kansas and Nebraska.
