Peak Price

St. Louis Fed:

Meanwhile, reported quality farmland, ranch and pastureland prices in the Eighth District were down slightly relative to last quarter’s price expectations. However, looking forward into second quarter 2013, lenders expected prices to rise slightly.
“As in our previous three surveys, bankers, on net, expect land values and cash rents to continue rising,” the report said. “However, it appears that banker expectations for future land value increases have moderated somewhat as fewer responses indicate that agricultural land values will continue to climb over the next quarter. Following that trend, bankers have also moderately tempered their short-term expectations for cash rents across the District.”
Lenders estimated that overall District quality farmland prices for the first quarter 2013 decreased by an average 2.3 percent to $5,111 per acre, compared with fourth quarter 2012. Meanwhile, ranch or pastureland prices decreased by an average of 5.1 percent to $2,274 per acre. Similarly, cash rents of quality farmland declined an average of 8.6 percent to $171 per acre, while ranch or pastureland prices fell an average of 4.5 percent to $120 per acre.
For the second quarter of 2013, lenders expected land values and cash rents to rise, albeit at a more modest pace. Again using diffusion index methodology, the expectations index for three-month growth in quality farmland for the District was 120. By zone, it was 100 in Little Rock, 113 in Louisville, 130 in Memphis and 121 in St. Louis. For ranch and pastureland prices, the average expectations index for three-month growth across the District was 120. By zone, it was 100 in Little Rock, 117 in Louisville, 138 in Memphis and 117 in St. Louis.

Peak farmland price?