KC Fed District has 20% higher land values from a year ago

A Kansas City Federal Reserve survey of ag lenders finds land values increased more than 20% at the end of 2021 from the end of 2020.

Their report says strength in ag real estate markets is supported by strong demand, historically low interest rates and greatly improved conditions in the farm economy.

The rise in inputs is seen as a risk to the sector but lenders expect favorable conditions in the economy to support farm finances and lead to even more gains in farmland values this year.

A lender in Southwest Kansas says, “Higher commodity prices have resulted in good earnings and increases in working capital positions, but there are concerns for extended drought, and high input costs.”

A southcentral Missouri lender says smaller land tracts have shown a significant increase in auction sales prices and while no large tracts have sold lately, they anticipate higher prices for those as well.

A central Nebraska lender says, “Input cost for grain production, mainly fertilizer and herbicides, will significantly increase break even prices for grain farmers.”

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