By K. McDonald on May 17th, 2012
Selected quotes from the districts area bankers:
“There is more liquidity in the farm sector than I have seen in my 30 years as a banker.” —Northeast Kansa
“Land prices are higher and more buyers are out-of-town investors.” —Southeast Wyoming
“Pasture that could potentially be tilled is bringing significantly higher prices.” —Southeast Nebraska
In both districts, there was some momentum to sell to take advantage of current high farmland prices, with more properties on the market.
The last part that I thought was interesting was this data on machinery sales. Combines and the largest of tractor sales is down, presumably because some purchases were already made in the early part of this boom.
[quote]Farm credit conditions strengthened further in the first quarter while demand for farm loans dwindled.
The index of farm loan demand fell to its lowest level since the late 1980s.[/quote]
The distinction these statements make regarding credit conditions versus farm loans is one I don’t grasp.
Does this distinction play out in the field use or the business model of the land owner ?
This report is from the perspective of the bankers who would like more business in these rural banks but instead farmer liquidity is high and farmers are paying off debt instead of borrowing. Not sure if that answers your question?
Thanks for pointing out the obvious that I missed – bankers perspective – which I can then connect to my question.
In other words, a liquid farmer has more options to them in either field usage or business focus.
That should be a net gain from the farmer on down to the buyer in the market.
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