Midwest farmland values rise for first time in three years
Although corn and soybean prices are lower than a year ago, farmland values in the Midwest are up by 1 percent compared to this point a year ago, the first year-over-year gain in three years, said the Chicago Federal Reserve Bank. But land values fell in the central Plains, according to ag bankers surveyed by the Kansas City Fed.
U.S. cropland prices stable for fourth year amid ag sector slump
Farm income plummeted with the collapse of the commodity boom in 2013 yet cropland, usually a farmer's biggest asset and the foundation of a farm's financial health, is as valuable as ever, the USDA says. Producers are making enough money to pay their mortgages, aided in part by low interest rates on the loans, while the perennial hunger among farmers, ranchers and investors to buy land is bolstering prices on the national level, although the Midwest and northern Plains feel the pain of lower commodity prices.
Regional food systems spur economic growth, Fed says
In a lengthy report, the St. Louis Federal Reserve Bank identifies regional food systems as "a promising avenue for economic growth for both rural and urban communities through the creation or enhancement of existing jobs and businesses."
Higher costs for farmers when interest rates rise
If the Federal Reserve raises interest rates, "it will mean higher costs for many producers" at a point when farm income is falling and growers are making increased use of credit, says Brent Gloy at Agricultural Economic Insights.
On the horizon, a period of stable farmland prices?
Farmland values soared during the agricultural boom that began in 2006, fueled by high commodity prices and low interest rates that made it easier to buy land.
Interest rates, the next threat to farmland prices
With sharply lower commodity prices at hand, "one of the key supports for sky high farmland values is changing rapidly," writes economist Brent Gloy at the Agricultural Economic Insights blog.
Feeder livestock borrowing up 50 percent in Fed survey
Agricultural banks say loan volume for feeder livestock rose by 50 percent in the second quarter of this year after rising by 13 percent year-over-year in the first quarter, according to the Federal Reserve in its Agricultural Finance Databook.
Rising debt is cloud on ag sector finances
Ag economist Jason Henderson of Purdue says "what has me a little nervous" is an upturn in borrowing as the farm sector heads into a period of lower commodity prices and farm income.
Interest rates rise faster than farmland values, says economist
For the first time since 2001, interest rates are rising faster than farmland values, creating a potential obstacle to land purchasers, said assistant economist Ty Kreitman of the Kansas City Federal Reserve Bank. “With interest costs now above average land value appreciation, farm operating profits will determine the magnitude of returns for financed land,” he said.