Despite the severe drought still gripping the U.S., farmland values continued to rise across most crop-growing regions in the third quarter. This is according to bankers surveyed in the latest report from the Kansas City Fed.
By Greyson S. Colvin:High commodity prices and net farm income have driven U.S. farmland values to record highs. The Federal Reserve Bank of Chicago reported that farmland values rose 13% over the last twelve months. Strong demand for farmland from farmers and investors has led to some irrational prices, including a $21,900 per acre sale in Sioux County, Iowa.
Greyson S. Colvin submits:Record grain prices and farmer income drove farmland prices to double digit gains in the last twelve months, according to the Federal Reserve Bank of Kansas City. The farmland market displayed the strongest year-over-year gains since 2007-08, as high farm income attracted farmer and investors to the market.
Today's corn prices are triple the price they were three years ago. High corn demand and high gasoline and diesel prices are having a ripple effect throughout every component of the food and agriculture system. In 2011, we saw many grocery store food item prices rise by double digits and Midwestern farmland prices went up 25%, attributable to high corn and soybean returns for farmers.
T. Marc Schober submits:The rural economy has soared to its highest level in nearly four years, as rising farmland values, recovering employment market, and improving banking conditions have improved for the rural economic outlook.