Thanks to record crop insurance payouts, farming income in the Great Plains trumped drought conditions. The resulting rise in land values was not limited solely to “good” farmland. As the following chart indicates, dryland farms and ranches also saw substantial gains in value.
Using responses from 232 banks, the Kansas City Fed presented its survey of Agricultural Credit Conditions covering the fourth quarter of 2012. A selection of observations by some of these bankers follows:
“Almost all recent auctions were sold to the largest farmers in the area wanting to get bigger. The buyers are strong, and most are cash sales.” — Northwest Missouri
“Crop insurance checks are a big part of financial statements in this area.” — Northeast Nebraska
“Lenders are competing hard for good loans.” — Eastern Kansas
“Pasture conditions are very poor, and livestock producers will continue to struggle without significant rainfall.” — Southeast Colorado
“Many young farmers have difficulty purchasing real estate at these higher prices.” — Southeast Colorado
“This area continues to see the effects of the 2012 drought mainly in high prices for livestock forage.” — Central Wyoming
Read the complete report at www.KansasCityFed.org.
Download the digital version of The Land Report’s Spring 2013 magazine.