Declines in farm incomes has resulted in a decline in the value of cropland across the southern Corn Belt and Mid-South reports the Federal Reserve Bank of St. Louis. The bank serves portions of eight states across southern Illinois and Indiana, portions of Missouri and into Kentucky, Tennessee, Mississippi and Arkansas.
The most recent survey of agricultural bankers finds the value of district cropland declined by 1.7% in the third quarter versus a year earlier after increasing by 2.6% in the second quarter. This was the second decline in the past three quarters. By contrast, land values for ranchland or pastureland rose by nearly 11% in the third quarter after falling by 1.2% in the second quarter, the bank reports.
Percent Changes in Farmland Values
The bank states that on average, survey respondents report cash rents for quality farmland inched up by 0.9% in the third quarter, while rents for ranchland or pastureland rose by 3.7%. Proportionately more bankers expect that values for quality farmland will fall further in the fourth quarter relative to a year ago, while a slight majority of bankers expect values for ranchland or pastureland will increase over the next three months. Proportionately more bankers expect that cash rents for all types of land are expected to decline over the next three months, the bank says.
Percent Changes in Cash Rents