More Somber News for Land Values

February 10, 2017 11:16 AM

Three Federal Reserve Banks that cover a large portion of the country say persistent weakness in farm income is reflecting in farmland values.

In the Corn Belt’s core, the Chicago district shows “good” farmland values in the fourth quarter of 2016 were down 1 percent from the third quarter. It’s also down 1 percent year-over-year, which is a smaller decrease than the previous two years.

In the St. Louis district, which covers the southern Midwest and South, quality farmland values during the fourth quarter of 2016 were 8 percent lower than they were during the fourth quarter of 2015. Ranch land or pastureland values were 3.5 percent lower than a year ago. Cash rents on ranchland are more than 11 percent lower.

In the Kansas City district, which covers the Great Plains to the Rockies, non-irrigated farmland values dropped 6 percent. Ranchland is off 7 percent from 2016. Cash rents for ranchland are down 12 percent. Depending on the region, some prices are holding. 

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Spell Check

Kearney, NE
2/10/2017 05:01 PM

  Farm land is probably 3-4 times over valued given current commodity prices. Pasture land is even worse. $3000+ per acre with calves $650-700 off the cow,.... even with low interest rates that's crazy. A quarter of pasture recently sold nearby. I would have had to sell 200 cows to pay for it-in a good year, a quarter can pasture 25 cows for a 5 month season-absolutely insane. I doubt it cash flows at $500 per acre. High land prices are only good for the tax man. Property tax on farm land in this area are $75-100 per acre. Hard to get rents to drop with taxes this high.

bad axe, MI
2/10/2017 09:57 PM

  The Fed's just needs to print more money to keep it up. If you have to get $74,000.00 an acre for the 911 million acres of farmland in this country to pay off the 68 trillion in credit out in this country. My question to the Fed is why is it going down? All the Fed has to do is raise the FHA guarantee loan program from 1 million to 2 million and these banks will floorboard the money into the farm economy like Santa Claus and we will all be all saved.

Wesley, IA
2/10/2017 06:15 PM

  It's all relative to the financial condition of the high bidders. Some people inherit a wad and will always look smart. It's farmers who bid the profit right out of farming. I used to sell feeder calves home raised and the guys who bought them to finish said the prices were too high for feeders so they couldn't make any money. Well, who bought 'em? Biggest problem is we start blaming ourselves as farmers and not looking where the real problem is: commodity prices. Until we get like the longshoremen and the trucker and pipe fitter's unions, we won't have profits for all. It's our need for 'independence' that kills off the bottom of the herd. I just love the comments about belt tightening we hear now. Four years ago the same people were whippin' up the horses. Talk won't help and it won't change. Do the best you can for your own. It's your only hope.1D8D17


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