Land Prices Remain Flat

From the Chicago Fed:

Agricultural land values in the Seventh Federal Reserve District were still higher than a year ago during the first quarter of 2014, but by just 1 percent. In contrast, “good” farmland values depreciated 1 percent in the first quarter of 2014 relative to the fourth quarter of 2013. Moreover, cash rental rates for District agricultural land were down 2 percent for 2014 compared with 2013. Based on the survey responses of 214 District agricultural bankers, these results highlighted the variation in farmland values due to the localization of farmland markets; increases in farmland values in some areas contrasted with decreases in others. Demand to purchase agricultural land was weaker in the three- to six-month period ending with March 2014 compared with the same period ending with March 2013, yet there were pockets where farmers remained keen to purchase additional land. The number of farms sold, the amount of acreage sold, and the amount of farmland for sale were down during the most recent winter and early spring compared with the previous winter and early spring. Almost three-quarters of responding bankers expected farmland values to be stable during the second quarter of 2014, but there was growing sentiment among them that agricultural land values would be headed downward.

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