Farmland prices and cash rents continue to decline through the first quarter of 2016, according to the Federal Reserve Banks of Kansas City and St. Louis. The banks' quarterly surveys of ag bankers found the value of nonirrigated and irrigated cropland declined 4% and 2%, respectively, across the Central and Southern Plains compared to a year earlier. Meanwhile, the value of quality farmland fell 6.4% from a year ago across the southern Corn Belt and MidSouth.
The St. Louis Fed bank says the value of ranch or pastureland remained steady to a year-ago levels. The Kansas City Fed bank indicates ranch or pastureland slipped 1% from a year earlier.
On a state-by-state bases, the value of nonirrigated and irrigated Kansas cropland fell 8% and 6%, respectively, on an annual, while ranchland values declined 3%. Western Missouri saw nonirrigated cropland dip 1% while pastureland values rose 2%. The mountain states of Colorado, northern New Mexico and Wyoming saw nonirrigated cropland decline 7% but irrigated cropland surge 13% and ranchland values rise 10%. In Nebraska, nonirrigated and irrigated cropland slipped 2% and 3%, respectively, with ranchland value also declined 2%. Oklahoma bankers report nonirrigated cropland slipped 1% while irrigated cropland fell 10%. In addition, Oklahoma ranchland values dipped 1%.
The Kansas City Fed also reports cash rents declined for all farmland types from a year earlier. "After remaining positive through most of 2015, ranchland cash rents dropped in the first quarter, declining 10%t from a year earlier," the bank states. "The sharp drop marked the largest annual decline in ranchland cash rents since the third quarter of 2009 and corresponded with a 30% decline in the price of feeder cattle over the same period. Ranchland cash rents increased slightly in Oklahoma and the Mountain States, but significant declines in Nebraska and moderate declines in Kansas weighed on the district average. District nonirrigated and irrigated cash rents were down 6% from the previous year, continuing trends of modest annual declines for both types of cropland," the bank notes.
The St. Louis says cash rents for farmland and ranch/pastureland fell 7.5% and 2.2%, respectively, in the first quarter. "After falling by 9.5% in the fourth quarter of 2015, cash rents on quality farmland fell by an additional 7.5% in the first quarter (relative to a year earlier)," the bank states. "After increasing over the previous two quarters, cash rents for ranchland or pastureland fell by an average of 2.2% in the first quarter of 2016. Proportionately more bankers expect that cash rents for both quality farmland and pastureland or ranchland will decline in the second quarter," the bank notes.