Published on:
08:52AM Feb 16, 2011
The Federal Reserve of Kansas City on Tuesday reported that farm land values in their district had risen substantially from the previous year. The year-over-year rise for non-irrigated land were as follows:
- Kansas 19.5%
- Missouri 6.6%
- Nebraska 17.6%
- Oklahoma 5.0%
The overall value for their district was a 14.8 percent rise for non-irrigated crop land and 12.9 percent for irrigated. Rising farm income, especially for crop farmers, drove the prices up almost 20% in Kansas and Nebraska.
Although farmland prices are up sharply, cash rents increased an average of 6% for crop land and 4% for ranch land.
Farm real estate loan-to-value ratios ranged from 50% to 90% with an average of 70%. Many bankers are now putting a cap on a set dollar per acre that they will loan on. For example, if the appraised value is $7,500 per acre, the bank may only allow an use of $5,000 per acre to loan against. This will normally require more of a cash investment by the farmer.
The farm income index soared in the fourth quarter approaching the highs set in 2008. I saw another article where the USDA is perdicting net farm income for 2011 of about $98 billion . It would not surprise me that we will go over $100 billion with the continued strong farm commodity prices across the board.
keyword:
Keyword
-
PREV
March Soybeans Daily numbers & Trade Ideas for 2/15/11
-
NEXT
Traffic Cameras and an App for Confessions