Rising crop prices are helping farmland values climb in the Midwest, according to a report released Tuesday by the Federal Reserve Bank of Kansas City. The value of irrigated cropland jumped 14.8 percent, while the value of non-irrigated cropland moved up 12.9 percent, compared to last year.
The bank’s quarterly survey of the 10th District region, which covers western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico, revealed that farmland prices rose for the fifth consecutive quarter since a drop in the third quarter of 2009, when the livestock sector was contracting due to the recession.
There is concern that farmland values may be climbing too high. “Bankers in the survey were starting to raise questions about the sustainability of farmland values and are paying closer attention to their loan-to-value ratios,” said Brian Briggeman, an economist at the Omaha branch of the Kansas City Fed.