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Farmland Forecast

RSS By: Marc Schober, AgWeb.com

Marc Schober is the editor of Farmland Forecast an educational blog devoted to investments in agriculture and farmland.

As Farmer Incomes Rise, Rents Follow

Mar 25, 2013

Farmer income is expected to reach a record high in 2013 and bankers indicated in March that cash rents will increase by over nine percent in 2013, according to the Rural Mainstreet Survey. Farmland values continue to appreciate although respondents are concerned about recent strong growth.

The RMI decreased slightly to 56.9 from 58.2 in January. "Very healthy farm income continues to boost the Rural Mainstreet economy though growth has slowed a bit," commented Creighton University economist Ernie Goss.

Rural Mainstreet Index March 2013

Agriculture

The farmland price index increased to 67.2 from 67.0 in February. This marks the 38th consecutive month the index has been above growth neutral. The farm equipment sales index fell to 60.5 vs. 65.8 last month.

According to Goss, "Current readings are consistent with farmland price growth between 12 and 16 percent. The Federal Reserve’s cheap money policies continue to bolster farm commodity prices, farm income, farmland prices and farm equipment sales. The Fed has indicated little change in this pro-agriculture money policy for 2013, which means we will likely continue to see healthy growth in farmland prices and farm equipment sales."

Farmland Price Index March 2013

Bankers were asked questions regarding inputs for 2013 and on average, they estimate a 6.5% increase in inputs over the next year. Bankers were also asked how much cash rents will increase in 2013; a 9.3% increase is expected.

Banking

The loan volume index increased to above growth neutral, 51.5, from 46.7 in February. The checking deposit index increased to 70.5 from 67.2 last month and the certificate of deposit and savings instruments decreased to 42.4 from 47.6 in February.

March's hiring index increased to 59.4 compared to 54.9 last month. The economic confidence index, which reflects expectations of the economy in the next six months, rose to 52.3 from 51.7 in February.

Survey

This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The RMI is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.

For daily articles on farmland and agriculture, visit www.farmlandforecast.com

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COMMENTS (1 Comments)

Cowlady Kim - King City, MO
So because farmland prices are going up and cash rents are rising, and equipment sales are a bit up this is record income for farmers? All the important markers here that are glossed over indicate the exact opposite. If less is being saved it is because we have to spend more of it. More loans means we have less cash to work with. The checking deposits increased because everyone had to draw from cds to pay bills. And the equipment sales index actually fell which means less was purchased. I wish you all would stop doing this, you say this each and every year and as far as we can see as an actual farmer that talks to other real farmers this is simply not true.
6:21 PM Mar 25th
 

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