2013 Ag Survey Shows Farmland Values Down, Incomes Up For Third Quarter

Farmland values and cash rents were down in the third quarter of 2013 (relative to the previous quarter), according to the latest Agricultural Finance Monitor, published by the Federal Reserve Bank of St. Louis. Despite these declines, farm income rose modestly across the District served by the Bank.

The survey for the report was conducted September 11 through September 30, 2013. The results are based on the responses from 47 agricultural banks within the boundaries of the Eighth Federal Reserve District. The District comprises all or parts of the following seven Midwestern and MidSouth states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

Because these initial data are not adjusted for any seasonal irregularities (should they exist), users are cautioned to interpret the results carefully. In particular, users are cautioned against drawing firm conclusions about longer-run trends in farmland values and agricultural lending conditions. Likewise, because the number of responses from each of the four zones in the District has been relatively small, entailing a higher-than-normal margin of error, we have decided to discontinue publishing zone-by-zone results. The results now refer to the entire Eighth District.

Farmland Values

Values for quality farmland across the District saw a decrease of 6% from the second-quarter average. Values averaged $5,332 per acre in the third quarter of 2013, down from $5,672 per acre in the previous quarter. Despite this decline, quality-farmland values remain 9.1 percent higher than at the same point last year.

Looking forward, “Bankers expect further erosion in District quality-farmland values over the next three months with an index value of 88,” stated the report. The report uses variables based on diffusion index methodology, where index values of 101-200 indicate higher-realized (or expected) income — based on survey responses — than a year ago, while index values of 0-99 indicate lower-realized (or expected) income than a year ago. A value of 100 indicates the same as a year ago.

According to the survey, the value of pastureland averaged $2,377 per acre in the third quarter, a gain of 1.4% over the past four quarters.

Farm Income

Farm income across the District increased modestly from the same quarter one year ago. This increase is in line with previous reports, which have generally indicated healthy farm economic and financial conditions in the District. “Going forward, survey respondents expect farm income levels in the fourth quarter of 2013 to remain modestly above their levels from a year earlier,” said the report.

In addition, the survey indicated that capital and household spending increased modestly in the third quarter relative to the same period one year ago. “For the fourth quarter of 2013, bankers expect that household-spending levels will remain above their year-earlier levels [index value of 105]. By contrast, bankers expect that capital expenditures by farmers will fall modestly short of levels seen in the fourth quarter of 2012 [index value of 95],” stated the report.

Cash Rents

Cash rents for quality farmland across the District averaged $181 per acre in the third quarter, which was down slightly from the second quarter ($183 per acre). However, cash rents for ranchland or pastureland rose modestly in the third quarter ($62 per acre) compared with their second-quarter average ($57 per acre). According to the survey, “Average cash rents have moved steadily upward since the second quarter of 2012 — though at an uneven pace. Bankers expect that cash rents for both quality farmland and ranch- or pastureland are expected to increase modestly over the next three months.”

Future Expectations

Expectations for farm income, expenditures and several other key variables in the third quarter were exceeded, relative to expectations from three months earlier. “In particular, expectations were exceeded for farm income, capital spending, availability of funds to extend loans and the rate of loan repayment,” stated the report.

In contrast, the demand for farm loans and household spending was a bit less than expected in the third quarter — though still modestly above year-earlier levels (index values of 105 and 116, respectively). Expectations of loan-repayment rates in the third quarter of 2013 exceeded banker expectations from three months earlier (index value of 105).

Leave a Reply

Management Stories

StewardshipOgallala Aquifer At Risk
September 4, 2015
The Ogallala Aquifer, with total water storage capacity about equal to that of Lake Huron in the Midwest, is the Read More
Valley Irrigation variable rate irrigation
StewardshipNebraska Getting Water Conservation Right
September 4, 2015
A precipitation map of Nebraska looks startlingly like a rainbow, with each colored band marking a different level of rainfall. Read More
ManagementReviewing MAGIE 2015
September 2, 2015
CropLife Editor Eric Sfiligoj talks what he saw at the recent Midwest AG Industries Exposition (MAGIE) show. Read More
StewardshipBee Buffer Strip Initiative Seeks 100 Ohio Farmers
August 31, 2015
The U.S. Bee Buffer Project, an initiative of the Pollinator Partnership (P2), Burt’s Bees and The Burt’s Bees Greater Good Read More
Top 100 Articles
Crop InputsLand ‘O Lakes, United Suppliers Finalize Merger
August 24, 2015
According to a press release on August 24, owners of United Suppliers, Inc. and members of Land O’Lakes, Inc. “have Read More
West Central Cooperative, Jefferson, IA
CropLife 100Iowa Cooperatives To Explore Unification
August 19, 2015
The boards of directors at two of Iowa’s leading farmer-owned cooperatives yesterday signed a letter of intent to study the Read More
CropLife 100Southern States Coop Hosting Drone Flight This Friday
August 3, 2015
Southern States Cooperative — No. 9 on the CropLife 100 — is hosting an FAA-approved drone demonstration at Grandview Farms Read More
CropLife 100Aligned Ag Distributors Adds Four New Owners
July 30, 2015
Aligned Ag Distributors LLC has announced the addition of four new customer/owners to Franklin Holding Co. LLC. They are: The Read More
CropLife 100Pinnacle Purchases California-Based Specialty Crops Retailer
July 20, 2015
Pinnacle Agriculture Holdings has successfully acquired California-based NH3 Service Co.  Operating as part of Pinnacle’s Performance Agriculture brand, the new locations Read More
Asmus Farm Supply liquid fertilizer facility features 20,000 square feet
CropLife 100Slideshow: Asmus Farm Supply Shows Off Its New Liquid Fertilizer Facility
July 15, 2015
Asmus Farm Supply, Rake, IA, recently added a new liquid fertilizer facility to its company operations. The new liquid fertilizer Read More
Latest News
StewardshipOgallala Aquifer At Risk
September 4, 2015
The Ogallala Aquifer, with total water storage capacity about equal to that of Lake Huron in the Midwest, is the Read More
Valley Irrigation variable rate irrigation
StewardshipNebraska Getting Water Conservation Right
September 4, 2015
A precipitation map of Nebraska looks startlingly like a rainbow, with each colored band marking a different level of rainfall. Read More
Crop InputsBayer CropScience: A Decade Of Innovation
September 3, 2015
BLAMS! It’s not a sound effect from the pages of a Superhero comic book. Instead this nifty acronym is used Read More
ManagementReviewing MAGIE 2015
September 2, 2015
CropLife Editor Eric Sfiligoj talks what he saw at the recent Midwest AG Industries Exposition (MAGIE) show. Read More
Melissa Olds Dow AgroSciences
Crop InputsDow AgroSciences: Highlighting The Past, Present & …
September 2, 2015
In general, media events held by large agricultural suppliers tend to focus primarily on what plans the company has in Read More
Mobile tablet
OpinionTaking Data Head On
September 2, 2015
As you read this column, I’m hoping that if you picked up the phone and gave me a call, you’d Read More
Young soybean field
Industry NewsArysta LifeScience Announces New Business Unit Head For…
September 1, 2015
Arysta LifeScience North America announces the addition of Rico Christensen, Business Unit Head, North America. Christensen will have responsibility for Read More
Wilbur Ellis Pink Soybean Seed Treatment
Crop InputsWilbur-Ellis Goes Pink With Soybean Seed Treatments For…
September 1, 2015
This past year, proceeds of pink-dyed soybeans treated and sold to Wilbur-Ellis seed customers in Chester, SD, went to two Read More
SprayersNORAC Active Wing Roll Slated For More Sprayers
September 1, 2015
NORAC Systems, a member of the Topcon Positioning Group, announces the release of Active Wing Roll for RoGator, Apache, New Read More
Syngenta Sign
FungicidesSyngenta’s Newest Fungicide Receives EPA Approval
September 1, 2015
Syngenta announced today that its newest succinate dehydrogenase inhibitor (SDHI) fungicide – Solatenol – has received registration from EPA and Read More
Flooded corn in Indiana
Crop InputsDelaying The Fertilizer Decision
September 1, 2015
Comments gathered from several retailers recently evidenced a classic good-news-bad-news scenario. Good news is prices and supplies of nitrogen, phosphate, Read More
StewardshipBee Buffer Strip Initiative Seeks 100 Ohio Farmers
August 31, 2015
The U.S. Bee Buffer Project, an initiative of the Pollinator Partnership (P2), Burt’s Bees and The Burt’s Bees Greater Good Read More
2015 ShowStopper Award, MAGIE
EquipmentA ShowStopper From Case IH: The Patriot 2250
August 31, 2015
For nine years now, visitors to the yearly Midwest AG Industries Exposition (MAGIE) show have been tasked with not only Read More
Crop InputsMonsanto, FMC Expand Roundup Ready PLUS Platform
August 31, 2015
FMC Corp. and Monsanto Co. announced today an expanded agreement to continue their participation in the Roundup Ready PLUS Crop Read More
Deere Nutrient Applicator
Eric SfiligojThe Good & Bad News From MAGIE
August 31, 2015
As I write this column, I’ve just returned from the annual Midwest AG Industries (MAGIE) trade show in Bloomington, IL. Read More
CPS Morenci receiving its 4R certification
StewardshipCPS Morenci Becomes First Michigan Facility Certified I…
August 31, 2015
The 4R Nutrient Stewardship Certification Program has announced that Crop Production Services, Inc.’s facility located in Morenci, MI, has been Read More
EquipmentDeere Announces Soucy Track Distribution Alliance
August 28, 2015
John Deere announces an alliance with Soucy Track to sell and distribute products through the John Deere dealer channel. “This Read More
FertilizerFall-Applied Phosphorus: A Rooted Investment
August 28, 2015
As commodity prices decrease and input prices continue to rise, farmers are seeking more efficient strategies for meeting a high Read More