Texas ranchland, dryland cropland post double-digit gains
The value of Texas crop and ranchland slipped in the second quarter versus the first quarter, but still posted strong annual gains. That’s according to the second-quarter survey of ag bankers conducted by the Federal Reserve Bank of Dallas.
The bank reports the value of dryland cropland across Texas rose 11.6% compared to a year earlier while the value of irrigated cropland rose 4.4%. In addition, the value of Texas ranchland rose 13.6% versus a year ago.
In addition to Texas, the Dallas Fed bank also serves northern Louisiana and southern New Mexico. When looking at the entire bank’s district, the value of dryland cropland rose 11%, irrigated cropland increased 8.7% and ranchland jumped 13.5%.
Looking ahead, the bank notes: “The anticipated trend in farmland values index grew in second quarter 2021 to its highest historical value, suggesting respondents expect farmland values to continue increasing.”
The Fed bank states survey respondents report overall better conditions across most regions of the district. They note recent rainfall has contributed to favorable crop yields, particularly for wheat, corn and cotton. Producers are optimistic about higher commodity prices but worried about increasing input costs. Cattle markets remain relatively steady, though prices are lower than in previous years. Real estate values continue to increase as some farmland and pastureland have been marketed for resale as residential development, the bank states.
Demand for agricultural loans continued to decline, with the loan demand index registering its 23rd quarter in negative territory. Loan renewals or extensions fell for the second quarter in a row while the rate of loan repayment continued to increase. Loan volume decreased across all major categories compared with a year ago except for farm real estate, dairy and operating loans.
Value of Texas Cropland and Ranchland Moves Higher on Annual Basis