The third quarter agricultural credit conditions report has been released from the Kansas City Federal Reserve Bank, which covers the region that includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and portions of western Missouri and northern New Mexico. Of interest from the quartly report always, is the report on farmland prices from the district.
As you can see from this current report chart (above) showing farmland price gains in percent change from the previous year, the three highest blocks are 1) nonirrigated (western) Missouri (up 27.2%), 2) irrigated Oklahoma (up 23.6%), and 3) nonirrigated Kansas (up 22.5%).
Much of recent-year farmland price appreciation has come from the lands that are best suited for growing cash crops of corn or soybeans, ever since the RFS ethanol mandate quickly drove up new demand for corn.
Could it be that we are now seeing a shift in demand for other types of farmland?
I don’t have the answer, as I’d need to see which lands have sold in those three states, but it would seem a logical and possible trend to watch going forward.
Note that the Seventh District is made up of the northern portions of Illinois and Indiana, southern Wisconsin, the Lower Peninsula of Michigan, and the state of Iowa.
● On a year-over-year basis, farmland values in the Seventh Federal Reserve District gained 14 percent in the third quarter of 2013.
● On a quarterly basis, the District’s agricultural land values saw a gain of 1 percent in the third quarter of 2013 after recording no increase in the previous quarter.
● The USDA predicted that the five District states’ harvest of corn for grain would be 38 percent greater than the drought-reduced harvest of 2012.
● For the five District states, soybean production was projected by the USDA to rise 8.5 percent in 2013 from its 2012 level.
● Even with the reoccurrence of drought in parts of the District, the third-largest corn harvest and soybean harvest just outside the top ten filled storage bins across the Midwest.
Exports of Corn, Soybeans and Wheat from the District
I excerpted the export portion of this chart (above) to show the dramatic change in numbers for corn, soybeans and wheat from this district over one and two years ago. Though the dollar amount values for the combined three commodities haven’t changed dramatically, the bushel amounts sure have – with corn and soybeans falling and wheat rising. (The USDA and BLS like to report dollar amounts, and the bushel amounts are less frequently seen.)