Rise in Farmland Values Seen as Healthy Sign for Ag

Farmland values have increased 15% over a year ago in the Tenth Federal Reserve District, which includes Colorado, Kansas, Nebraska, Oklahoma and Wyoming; 43 counties in western Missouri; and 14 counties in northern New Mexico.

“Though some risks remain, the agricultural sector will be well positioned heading into 2022 alongside the persistent strength in commodity prices and double-digit gains in land values,” economists Nathan Kauffman and Ty Kreitman of the Kansas City Fed said in an analysis published this week.

Most lenders in the district are still optimistic about the farm outlook for agriculture but are somewhat concerned about rising input costs, Kauffman and Reitman wrote. In addition, “while conditions have improved substantially from recent years throughout the region, the pace of increase in farm income and loan repayment rates was slower in areas most significantly impacted by drought.” “Nevertheless, they added, farm income and loan repayment rates continued to increase at a steady pace and contributed to multi-year lows in problem loans and asset liquidation.”

EDITOR’S TAKE:

You might be tired of hearing us at CAD say “Look Beyond Your Lot”, but this article underscores precisely why we keep hammering the point. What it tells you as a truck dealer is that farmers/ranchers, or anyone involved with production agriculture, is seeing their collateral (land) rise month after month. In addition to strong commodity prices overall, land prices are the foundation on which a farmer is able to guarantee their loan. In other words, they have cash, and they are very credit-worthy. Plus, you have AgPack that offers exclusive rebates and discounts worth thousands of dollars to help them fight against rising input costs in 2022. When your other customers are overcome by inflationary pressures and pull back, who will purchase all those 2021 and 2022 models that are sitting on your lot – farmers/ranchers, that’s who! Look Beyond Your Lot!!!