farmland value
Do farmers and bankers agree it’s time to cut back on borrowing?
New farm lending is down sharply by agricultural banks, plunging 40 percent during the closing three months of 2016 in the largest year-over-year decline for non-real-estate loans in nearly two decades, says a quarterly Federal Reserve report. "As the outlook for farm income generally has remained weak and farmland values have continued to decline, both lenders and borrowers may have been more apprehensive about adding new debt heading into 2017," said the report.
Tough year ahead for farmers due to low grain prices, says Purdue
Grain prices will run at or near decade lows, keeping farm income in a slump, say Purdue agricultural economists. In the Purdue Agricultural Economics Report 2017, they say the average value of farmland in Indiana was $7,041 an acre, down by 13 percent from the 2013 peak because of weakness in the farm sector.
Iowa farmland values down for third year, more declines expected
Farmland values in Iowa, the No. 1 corn and hog state, are down by 17.5 percent since the collapse of commodity prices in 2013, says an annual survey by Iowa State University. ISU researchers joined other analysts in forecasting land values will continue to fall for a couple years more in the first significant adjustment in U.S. values since the agricultural recession of the mid-1980s.
U.S. farmland values to fall 20 percent in ‘moderate repricing’
MetLife Agricultural Finance says low corn and soybean prices are constraining farm income and will lead to the "first significant correction" in farmland values since the agricultural recession of the mid-1980s, reported Agrimoney. The lender forecast land prices to fall 20 percent by 2018 from their recent peak.
Midwest farmland values dip again in longest decline in three decades
A softer landing for producers after ag boom collapses
U.S. farm income will fall for the third year in a row, said the Agriculture Department, but the impact is not expected to be as severe as feared at the start of the year. In a tri-annual forecast, the USDA estimated net farm income — the net value of production — at $71.5 billion, much better than the $54.8 billion that it estimated in February although far below the record $123.8 billion of 2013 as the seven-year agricultural boom collapsed under the weight of large crops worldwide.
Will low commodity prices pull down farmland-rental rates?
The record-setting corn and soybean crops forecast by USDA — the latest in a string of bumper crops — will drive down commodity prices and put pressure on growers to cut their costs, says economist Gary Schnitkey of U-Illinois. Midwestern growers will lose money at current rental rates, says Schnitkey, and will not break even until rates drop by $50 an acre, or roughly one-fifth.
Farmland values decline for first time in seven years
The average value of farmland including all land and buildings dipped $10 to $3,010 per acre acre in 2016 from a year earlier, the first such decline in the U.S. since the recession of 2009, the USDA National Agricultural Statistics Service reported in its annual Land Values Summary. Land values have been pressured by booming harvests and falling crop prices.
Farmers lean heavily on operating loans to offset weak cash flow
Persistently weak cash flow has prompted U.S. farmers and ranchers to borrow far more money in short-term operating loans than usual, said the Kansas City Federal Reserve Bank. Loan volume of around $55 billion was 50 percent above the 10-year average, said the bank, while the soft farm economy was pulling down farmland prices throughout the western Corn Belt and Plains.
Brexit may put a floor under sagging U.K. cropland values
Over the past year, UK cropland values have fallen by 9 percent, says Agrimoney, with one land company seeing a continued decline this summer while another says prices are stabilizing after the steepest decline in at least 12 years. Both companies "were sanguine about the effect of a British exit from the EU on land prices," said Agrimoney, based in London.
Farmland values in Nebraska fall for second year
The slump in crop and livestock prices was "the most negative factor for the second year in a row," with Nebraska farmland values down by an average 4 percent this year, said the University of Nebraska. The decline, to $3,115 an acre, lowered the value of land and buildings by $5.8 billion, to $132 billion, said the annual report.
Will the next farm bill ‘Make CRP great again’?
The Conservation Reserve, the largest U.S. land-idling program, has shrunk to its smallest size since the late 1980s, when it was only a couple of years old. With low commodity prices forecast for years into the future, putting a pinch on farm income, economist David Widmar says a proposal to expand the reserve, which pays landowners an annual rent in exchange for retiring fragile farmland for 10 years or longer, "is likely to capture broad political appeal."
Lower livestock prices darken expectations in farm country
Crop and livestock producers are less optimistic about the economic outlook for the farm sector, according to the Ag Economy Barometer sponsored by Purdue and the CME Group. The chief reason was a decline in cattle prices during May, said Purdue economist Jim Mintert.
New York City Council hatches plan to protect Hudson Valley farmland
Some members of New York City Council want to allocate $50 million from the city budget pay farmers to keep farming in Hudson Valley, reports The New York Times.
Farmland rental rates in Iowa fall for third year in a row
Cash rental rates for corn and soybean land in Iowa are down a cumulative 14.7 percent since 2013, according to a survey by Iowa State University. The average rate for this year, $230 an acre, is down 6.5 percent from last year's $246 an acre.
Farmers tighten belts to endure low crop prices
Ag bankers across the Farm Belt expect the slump in farm income to persist through spring, with producers economizing on household spending and big-ticket purchases due to low commodity prices, according to reports by Federal Reserve banks in the Midwest and Plains.
Farm loan volume near record highs due to ‘suppressed’ income
"Persistently weak profit margins in the farm sector continued to intensify the challenge of maintaining adequate cash flow" in the first three months of this year, says the Kansas City Federal Reserve Bank.
Slump in commodity prices pulls down Farm Belt land values
Farm bankers across the Midwest and Plains say that the persistent slump in crop and livestock prices pulled down farmland prices, with further declines expected through spring.