Farmland values in the Federal Reserve’s Tenth District held steady in the fourth quarter of 2018 despite risks to ongoing stability, according to the Kansas City Fed’s quarterly Agricultural Credit Survey. While demand for farmland remained relatively strong across the district, weaknesses in the crop sector continued to dampen the overall agricultural economy.
The report says that risks to the outlook for farmland values in the quarter included slightly higher interest rates and an uptick in the pace of farmland sales in states with higher concentrations of crop production. In addition, continued deterioration in farm finances and credit conditions could put further pressure on values for farm real estate. Looking into 2019, bankers’ expectations for farmland values were slightly weaker than a year ago. Still, the report says the value of farmland continued to provide ongoing support to the farm sector and remained a key factor to monitor in 2019. The Tenth District covers parts of or all of seven different states, including Colorado, Kansas, Missouri, Nebraska, New Mexico, Oklahoma and Wyoming.