Thursday, May 30, 2013

St. Louis Fed Posts Q1 Farmland Price Decline

The St. Louis Fed (8th) doesn't have as intensely agricultural an economy as the 9th, Minneapolis; the 7th, Chicago or the 10th, Kansas City but it does include a big chunk of the southern Illinois corn belt and the #1 rice producer, Arkansas and thus could be a harbinger for a leveling off of the land price increases and even some downticks.

From the Federal Reserve bank of St. Louis:
...Surprisingly, reported quality farmland, ranchland or pastureland prices are down slightly relative to the prices indicated in the fourth quarter of 2012...
The decreases were 2.3% for quality farmland and 5.1% for ranchland and pastureland.
More troubling, cash rents were down 8.6%.
Here's the Agricultural Finance Monitor (5 page PDF)

As I said back in 2011:
We've been following this trend for the last three years and have been asked when will it top?
One sign will be when Optima Fund Management brings their American Farmland Company public, still a few years away....
I think we're closer to the end of the boom than the beginning. The key now is farm income.
We'll be back with more tomorrow.