Saturday, August 17, 2013

Farmland Values Rise; Cash Rent Av. $182 Acre – St. Louis Fed Reserve

AgFax.Com - Your Online Ag News Source


Farmland values continued to rise during the second quarter of 2013, according to the latest Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis. Farm income, as well as capital and household spending, also increased slightly compared with a year ago.

The survey for the report was conducted from June 11 through June 28, 2013. The results were based on the responses of 48 agricultural banks located within the boundaries of the Eighth Federal Reserve District. The Eighth District comprises all or parts of the following seven Midwest and Midsouth States: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

Farmland Values

On average, Eighth District quality farmland and ranch or pastureland prices were higher than first-quarter 2013 and second-quarter 2012 levels. In addition, many lenders reported that they expected prices for quality farmland and ranch or pastureland to increase in the third quarter relative to the third quarter 2012.

Quality farmland prices averaged $5,672 per acre in the second quarter of 2013, up 11 percent from an average $5,111 in the first quarter of 2013 and up more than 20 percent from $4,705 per acre in the second quarter of 2012. Ranch and pastureland prices were also slightly higher in the second quarter of 2013, with District lenders reporting average prices of $2,372 per acre, up about 4 percent from $2,274 per acre in the first quarter 2013 and up close to 1 percent from $2,349 per acre the previous year.

Looking ahead to the third quarter, lenders reported that they expect land values to rise relative to last year. A proportionately larger number of respondents expect values to increase for quality farmland and ranch or pastureland in the third quarter relative to a year earlier, the report said. Using variables based on diffusion index methodology, the average expectations index for quality farmland in the third quarter of 2013 was 127, while for ranch and pastureland prices, the index value was 108. (With diffusion index methodology based on survey responses, 101-200 indicates overall expectations of higher values, while 0-99 indicates expectations of decreasing values. A value of 100 indicates expectations remain the same.)

Farm Income

Average farm income and spending rose slightly in the second quarter of 2013 compared with a year ago. “On net, respondents indicated that second-quarter District farm income, along with capital and household spending, increased modestly relative to their respective levels one year ago,” the report said.

Based on diffusion index methodology, survey results showed an actual income index level of 108 for the second quarter of 2013 across the District. Looking ahead at the third quarter, lenders indicated they expected lower farm income, with survey results showing a diffusion index value of 91. “Across the District, bankers expect farm income to fall over the course of the next quarter compared with the third quarter of 2012,” according to the report.

Cash Rents

Average cash rents per acre for quality Eighth District farmland during the second quarter of 2013 were higher than the first quarter 2013 and the second quarter of 2012.

For the second quarter 2013, cash rents for quality farmland averaged $183 per acre, up 6.7 percent from an average $171 per acre in the first quarter 2013 and up 12.9 percent from an average $162 per acre the previous year. Meanwhile, lenders reported cash rents for ranch or pastureland of $57 per acre, down from the first quarter’s average of $64 per acre, but remaining above last year’s average of $53 per acre.

Looking forward, lenders expect rents to increase in value for all land categories during the third quarter of 2013. The report also noted that “anecdotal information collected from other sources suggests some shift in cash rents toward a variable or profit-sharing basis,” and that this shift may not be fully captured in current cash rent data.

Ag Loan Demand and Repayments

On average, lenders reported that while demand for agricultural credit across the District remained unchanged in the second quarter compared with a year ago, they expected loan demand to pick up in the third quarter. In addition, survey results showed more funds were available to prospective borrowers during the second quarter of 2013 than a year ago, and this should remain the case in the third quarter. Loan repayment rates also remained essentially the same compared with a year ago, and expected to remain unchanged in the third quarter. Average interest rates on most types of loans increased slightly from the first quarter of 2013, with rates on variable interest loans increasing more than fixed-rate loans.


Tags: , , , , , , , , , ,


Leave a Reply

Name and Email Address are required fields. Your email will not be published or shared with third parties.

Sunbelt Ag News

    Grain TV: Markets Hit by Selling Pressure10-30

    DTN Livestock Close: Cattle Complex Enjoys Short-Covering Rally10-30

    Doane Cotton Close: Strong Exports Continue10-30

    ELS Cotton Competitive Payment Rate Is Zero10-30

    AFB Grain-Soybean Close: Strong Exports Unable to Support Prices10-30

    AFB Cotton Close: Futures Retrace Gains10-30

    AFB Rice Close: Futures Turn Strongly Lower10-30

    Biodiesel: 2014 A Tough Year for Producers10-30

    DTN Cotton Close: Reverses off New High to End Lower10-30

    Kansas Officials Point Out Flaws in Clean Water Act – DTN10-30

    DTN Grain Close: Rally Pauses as Prices Backtrack10-30

    Ag Secretary Discusses Challenges Facing Future Farmers — DTN10-30

    DTN Livestock Midday: Sharp Losses Develop in Hog Futures10-30

    U.S. Grain Transportation: Barge Rates Remain Well Above Average10-30

    Mississippi: Fall Tests for Nematodes Help Keep Crops Healthy10-30

    DTN Grain Midday: Trade is Flat to Lower10-30

    DTN Cotton Open: Futures Tick Near Unchanged10-30

    California’s SJV Included in Report on Soil Loss to Salt Damage10-30

    U.S. Energy: Gas Prices Drop to Lowest Since December 201010-30

    Gasoline Prices: Average Drops 6 Cents10-30

    Propane Stocks: Down 1.3M Barrels10-30

    Diesel Prices: Decrease by 2 Cents10-30

    New Research Study Shows the Value of Neonics10-30

    DTN Livestock Open: Futures Staged for Mixed Start10-30

    DTN Grain Open: Markets Extend Rally Overnight10-30

    Keith Good: Drought Impacts California Rice; Farm Land Market Cools10-30

    Texas: Pecos County Pesticide Workshop, Fort Stockton, Nov. 1810-29

    Florida: Sugarcane Field Day, Quincy, Nov. 310-29

    Texas Wildlife: New Deer Management App Just in Time for Deer Season10-29

    Peanut Stocks: Utilization Up 6%, Stocks Total 1.2B Pounds10-29

    Texas Pecans: Fairly Light Deliveries, Good Demand10-29

    Louisiana Pecans: Deliveries Insufficient to Establish Prices10-29

    Georgia Pecans: Buying Interest Fairly Active10-29

    Georgia: Brooks County Clean Day Rescheduled to Nov. 1210-29

    AgFax Cotton Review: U.S.’s High Quality Offers Market Resilience10-29

    Georgia: USDA Designates Early County Primary Natural Disaster Area10-29

    China Consumers Often Misled on GMO Food Issues — DTN10-29

    DTN Fertilizer Outlook: Demand May Fall with Crop Prices10-29

    Grain Market Math Test, Part 2 — DTN10-29

    Welch on Wheat: Crop Condition Right on Average10-28

    Welch on Grain: Corn Harvest Runs Behind but Conditions Remain High10-28

    USDA: Weekly National Peanut Prices10-28

    Mississippi Wild Hogs: Trapping Is the Best Control Method10-28

    DTN Fertilizer Trends: Stubborn Prices Pose Dilemma for Grain Farmers10-28

    What Happens to Corn Prices When Stock Market Falls? — DTN10-28

    Georgia Peanuts: Spider Mite Damage Rises in Dry Weather10-28

    Vilsack: COOL Appeal Decision to be Made in January — DTN10-27

    Livestock: Record Cattle Prices, Again and Again10-27

    AgFax Rice Review: Defense Against Arsenic; Japan’s Modernization10-27

    Mandatory COOL: Detrimental to Trade, No Easy Solution — Economist10-27

    Group Works to Improve Fertilizer Efficiency — DTN10-27

    Shurley on Cotton: Lackluster Week Closes on High Note10-27

    China’s U.S. Corn Rejections Prompt New Business — DTN10-27

    Flint on Crops: Mississippi Snow Arrives in October10-27

    Rice Market: Technical Indicators Remain in “Sell” Mode10-24

    Rice Crop: Harvest Nearly Complete, Ratoon Harvest to Start Soon10-24

    Rose on Cotton: Increased Export Competition with India10-24

    Sunbelt Ag Events

    Rice News

     

    About Us

    AgFax.Com covers agricultural trends and production topics, with an emphasis on news about cotton, rice, peanuts, corn, soybeans, wheat and tree crops, including almonds, pecans, walnuts and pistachios.

      

    This site also serves as the on-line presence of electronic crop and pest reports published by AgFax Media LLC (formerly Looking South Communications).

        

    Click here to subscribe to our free reports.

      

    We provide early warnings and confirmations about pests, diseases and other factors that influence yield. Our goal is to quickly provide farmers and crop advisors with information needed to make better and more profitable decisions.

         

    Our free weekly crop and pest advisories include:

    • AgFax Midsouth Cotton, covering cotton production and news in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Missouri.

    • AgFax Southeast Cotton, covering cotton production and news in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.

    • AgFax Southwest Cotton (new for 2013!), covering cotton production and news in Texas, Oklahoma, Kansas and New Mexico.

    • AgFax West (formerly MiteFax: SJV Cotton), covering California cotton, alfalfa, tomatoes and other non-permanent crops in California's Central Valley.

    • AgFax Rice covering rice production and news in Arkansas, Louisiana, Mississippi, Missouri and Texas.

    • AgFax Peanuts, covering peanut production in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia.

    • AgFax Southern Grain: covering soybeans, corn, milo and small grains in Southern states.

    • AgFax Almonds, covering almonds, pistachios, walnuts and other tree crops in California's Central Valley.

    • AgCom 101, providing guidance to ag professionals involved in social media.

    Our newsletters are sponsored by the following companies: FMC Corporation Chemtura Dow AgroSciences.

          

    Mission statement:

    Make it as easy as possible for our community of readers to find and/or receive needed information.

              

    Contact Information:

    AgFax Media. LLC

    142 Westlake Drive Brandon, MS 39047

    601-992-9488 Office 601-992-3503 Fax

    Owen Taylor Debra L. Ferguson Laurie Courtney

          

    Circulation Questions?

    Contact Laurie Courtney