Farmland Values Rise in First Quarter
May 17, 2010
The Federal Reserve Bank of Kansas City issued their quarterly report on agricultural credit conditions for the first quarter of 2010. They indicated farmland values rose due to strong demand and the rebound in livestock prices. Both farmer and non-farm demand appears to be very good. Looking ahead, they expect farmland values to hold steady.
However, most district bankers reported that farm income fell slightly in the first quarter, however, they expect higher levels in the second quarter with the year being steady.
Farmland values for the quarter rose about 2% with Nebraska having the highest gains of about 6%, however, Oklahoma and the mountain states were lower for the quarter. This was the strongest gain in over a year primarily due to the livestock rebound. Interest rates edged down slightly, averaging 6.6 percent.
In reviewing the long-term chart shown in the report, there have only been 3 quarters that have been negative since 1990. Two quarters were in late 1990 when the Internet bubble was at its highest and one quarter last year. Owning farmland has been a very good investment over the last 20 years. We all hope the trend continues for the next 20 years.