The Tenth Federal District estimated that irrigated and non-irrigated farmland increased 6.3% and 6.9%, respectively, from the same time last year. Select areas of this region even saw double-digit farmland value increases from last year.
That may be due to some drought relief around the region, according to Greyson Colvin, managing partner and founder of Colvin & Co.
"Non-irrigated land has not seen comparable increases over the past several quarters due to the drought across the district, but storms over the past few months have provided precipitation, easing drought conditions.
Areas that captured double-digit gains include Kansas irrigated ground (+11.7%) and Oklahoma non-irrigated and irrigated ground (+15.4% and +14.4%). Meantime, the Mountain States collective of Colorado/New Mexico/Wyoming reaped a double-digit trifecta on non-irrigated (+20.8%), irrigated (+15.1%) and ranchland (+18.8%).
Credit conditions across the Tenth District remain healthy despite lower grain prices, Colvin adds.
"Bankers surveyed believe that several years of strong profitability in the crop sector allowed farmers to financially position themselves to weather a decline in farm income in 2014/15," he says.
Bankers surveyed also report an ample supply of capital is available for farm loans. They expect interest rates to remain steady through the third quarter. Moving into the fourth quarter, Colvin expects farmland value increases to continue.
"Record-breaking yield expectations for corn and soybeans should be another factor when evaluating farm income in 2014," he says. "The decline in crop prices should be partially offset by the increase in expected bushels per acre, lessening the impact on overall farm income."