Quality farmland values across the Mid-South and southern Corn Belt fell 1.4% in the first quarter from a year earlier, according to the Federal Reserve Bank of St. Louis. This marked the first decline since the third quarter of 2017, the bank noted. By contrast, ranchland or pastureland values increased sharply for the second consecutive quarter. After increasing by 14.8% in the fourth quarter of 2017, ranchland or pastureland values surged 13% from a year earlier.
Respondents expect this divergence in land values to continue into the second quarter, the bank notes. Proportionately more bankers expect quality farmland values to decline over the next three months, while proportionately more bankers expect ranchland or pastureland values to increase over the next three months. Similar to the pattern for land values in the first quarter, cash rents for quality farmland values declined slightly in the first quarter from a year earlier, while cash rents for ranchland or pastureland rose sharply.
Looking forward, the bank says proportionately more bankers expect cash rents for quality farmland will decline over the next three months, but that cash rents for ranchland or pastureland values will increase.