Nebraska farmland values rose 13 percent in the third quarter, the Kansas City Federal Reserve branch said, with Iowa’s climbing 9 percent.
The Kansas City branch of the nation’s central bank, whose area includes Nebraska and Iowa, said some agriculture bankers surveyed said the figures represent a moderation from recent values, as falling crop prices are being priced into the land sales equation. Other survey respondents, the K.C. Fed said, expect land values to stay at current lofty levels.
“Many bankers reported farmland value gains have begun to moderate, particularly in corn-producing states,” said the Agricultural Finance Databook released late this week. “Most bankers in the Chicago, Dallas and Kansas City Federal Reserve Districts believed that farmland values would likely hold at current peak levels and did not expect a major decline heading into 2014.”
Iowa is the nation’s largest corn producer, while Nebraska is third. In November, the K.C. Fed said second-quarter farm income dropped substantially and that farmland values continued to rise.
In the current report, demand for farm operating loans rose modestly in the third quarter, the K.C. Fed said.
“The Chicago, Dallas, Kansas City, St. Louis and San Francisco districts indicated an uptick in demand for operating loans considering the effect that lower crop prices could have on farm income prospects,” the report said. “The potential for lower farm income also dampened capital spending plans.”
Farm credit conditions generally held steady, according to the report. Farm loan repayment rates remained above year-ago levels and the “number of loan renewals and extensions was relatively modest.”
“Even with slightly higher loan demand, agricultural bankers reported that sufficient funds were available for farm loans,” the report concluded.