Cropland and ranchland values continue to post strong gains over year-ago levels, but the rate of increase slowed during the second quarter quarter of 2012, according to the most recent survey of ag bankers in the central and southern Plains conducted by the Federal Reserve Bank of Kansas City. The bank serves Kansas, northwest Missouri, Nebraska, Oklahoma and the Mountain States of Colorado, Wyoming and northern New Mexico.
"District farmland values rose less rapidly in the second quarter and remained well above year-ago levels," the bank said. "Non-irrigated cropland values rose solidly and irrigated cropland values held steady. Looking forward, more than three-quarters of survey respondents expected farmland values to hold at current levels during the rest of the growing season."
Farmland values throughout the bank district rose less than 3% during the second quarter, roughly half the rate of growth experienced at the beginning of the year. Non-irrigated cropland values rose solidly, while irrigated cropland values held steady and ranchland values edged up, the bank said.
Despite the slower quarterly gains, district farmland values remained well above year-ago levels. "During the second quarter, district irrigated and non-irrigated cropland prices remained more than 25% above year-ago levels while district ranchland values climbed higher with annual value gains averaging 16%. Bankers noted that strong demand for farmland raised interest in more marginal tracts of land with production potential," the bank reported. Nebraska continued to lead district annual farmland value gains with cropland prices more than 35% above year-ago levels and ranchland values almost 27% higher. However, annual farmland value gains in Nebraska were beginning to slow with less rapid land value growth during the second quarter. Oklahoma bankers reported the smallest year-over-year gains in farmland values as many areas of the state endured a second year of extreme drought.
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