The retreat in US farmland values is showing signs of petering out, in the Corn Belt at least, amid a slowdown in the pace of agricultural finances – although crop price weakness as raised fears of fresh "pressures"....MORE
Farmland prices in key Corn Belt corn and soybean growing states such as Illinois, Indiana and Iowa rose by 1% year on year in the April-to-June quarter, the US Federal Reserve's Chicago bank said.
"This was the first year-over-year gain in three years," the Fed said, with growth particularly strong in Iowa, the top corn-growing state, where values rose 3% year on year, their fastest since the July-to-September period of 2013.
Farmland values in the region, which dropped by roughly 7% over 2014-16, "seemed to stabilise in the first half of 2017, despite lower prices for corn and soybeans relative to a year ago", Fed senior business economist David Oppedahl said.
'Easing in the pace of deterioration'
The recovery came amid signs of an easing in the pace of deterioration in farm financial indicators, with the Fed saying that agricultural credit conditions "slowed their downward trend.
"Repayment rates for non-real-estate farm loans relative to a year ago were still down during the second quarter of 2017, but less so than in the first quarter," Mr Oppedahl said.
And ideas of some market stabilisation were supported by data from the Fed's St Louis bank, which covers more southerly Corn Belt areas, down to the Delta state of Mississippi, which showed "quality" farmland values recording "small decreases", of 0.8% year on year, in the April-to-June period.
"Ranchland and pastureland exhibited [price] increases compared with a year earlier," of 4.5%, the St Louis Fed said.
Plains decline
However, further west, in the Plains, better known for wheat growing, farmland values continued to decline, by 5% year on year, in a region including Kansas, Nebraska and Oklahoma states, covered by the Kansas City Fed....
I believe I shall purloin that "Easing in the pace of deterioration" line, it sounds so much better than "we're losing money slower now".
If interested see also:
August 11's "Foreign investors are snapping up US farms" and "Grantham Mayo Van Otterloo Is Selling Their Forestry/Agriculture Joint Venture"
And July 26 "Real Assets: Institutional Money Pulling Back From Timber, Farmland":
There ya go. These things don't turn on a dime but, to quote some guy, "This is not the end, it is not even the beginning of the end, but it is perhaps the end of the beginning."
No hurries, no worries....
