Creighton Survey Finds Nearly 30% of Farmland Sales are for Cash
Apr 19, 2013
Creighton University's Rural Mainstreet Index confirms still strong rural economy and farmland values. The monthly survey found the Rural Mainstreet Index (RMI), which ranges between 0 and 100 with 50.0 representing growth neutral, climbed to 58.3 from March’s solid 56.9. The survey of bank CEOs in 10 midwestern states is conducted monthly by Dr. Ernie Goss at Creighton University.
On farmland values, the monthly survey's farmland price index dipped to a still strong 66.9 from March’s 67.2. This is the 41st consecutive month that the farmland-price index has been above growth neutral. The farm equipment-sales index declined to 57.3 from 60.5 in March. “Crop farmers and businesses linked to crop farming and energy continue to experience very positive economic conditions with improving balance sheets,” says Goss.
In addition, thebank CEOs were asked about the share of farmland sold to nonfarm investors and the proportion of farmland sold for cash. Bankers indicated that almost one in five, or 19.8%, of sales were to nonfarm investors. This is almost identical to last April’s 21%. Bankers reported that approximately 28.6%, only slightly less than last April’s 29%, of farmland sales were for cash.
“Despite very strong growth in farmland prices, bankers are indicating little change in investors’ appetite for farmland. Likewise, farmland price growth over the past year in excess of 20% for parts of the region did not alter the share of land purchases for cash,” states Goss.
Each month, community bank presidents and CEOs in nonurban, agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.
This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300.
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