Farmland Values up in First Quarter
The Federal Reserve Bank of Kansas City issued their quarterly report on agricultural credit conditions for the first quarter of 2010. They indicated farmland values rose due to strong demand and the rebound in livestock prices. Both farmer and non-farm demand appears to be very good. Looking ahead, they expect farmland values to hold steady.
However, most district bankers reported that farm income fell slightly in the first quarter, however, they expect higher levels in the second quarter with the year being steady.
Farmland values for the quarter rose about 2% with Nebraska having the highest gains of about 6%, however, Oklahoma and the mountain states were lower for the quarter. This was the strongest gain in over a year primarily due to the livestock rebound. Interest rates edged down slightly, averaging 6.6 percent.
In reviewing the long-term chart shown in the report, there have only been 3 quarters that have been negative since 1990. Two quarters were in late 1990 when the Internet bubble was at its highest and one quarter last year. Owning farmland has been a very good investment over the last 20 years. We all hope the trend continues for the next 20 years.
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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