Federal Reserve Bank Says Land Values are Stabilizing
The Federal Reserve Bank of Kansas City issued their second quarter report on thier survey of agricultural credit condtions. Some highlights of the report are:
- 1. Farmland values seem to be stabilizing. The value of farmland in the second quarter was basically unchanged from the second quarter of 2008. Irrigated acreage was slightly higher due to lower energy prices.
2. Farmers are continuing to dominate the demand for farmland, however, investors do seem to be coming back in to bid on quality land. The supply of farm land for sale has declined substantially so this may be propping up the price.
3. District farm income did edge up in the second quarter and capital spending increased slightly due to the expectations for higher farm income.
4. Farm credit conditions continue to hold steady and may improve in future months.
5. Demand for farm loans rose from a very weak first quarter.
The major crops in this area are starting to be harvested and if there is no major freeze, we are probably looking at very good yields.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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