Ag real estate values in the Central Plains were flat through the end of 2024, reports the Federal Reserve Bank of Kansas City. In addition, the bank says credit conditions deteriorated slightly in the district.
According to lenders in the region, the value of nonirrigated farmland changed by less than 1% compared with the previous year.
Land market conditions varied in some states, but in aggregate, values were generally unchanged, and sales volumes slowed over the past year as the farm economy weakened and farm loan interest rates remained at multi-decade highs.
Alongside subdued economic conditions, the share of lenders reporting lower farm income and loan repayment rates increased into the fourth quarter and demand for non-real estate financing grew.
According to survey respondents, the value of nonirrigated and irrigated farmland in the region increased less than 1% and about 2% from the prior year, respectively. Ranchland values grew slightly more during the final months of the year and increased by an average of about 5% over the past four quarters.
Cash rents for farmland also generally remained unchanged throughout the past year. Rental rates charged on district farmland increased by less than 2%. Ranchland cash rents increased by about 5% from the previous year.
Changes in values varied across states and types of land. The value of nonirrigated land declined slightly in western Missouri and Nebraska but increased modestly in other states. Ranchland values grew at least modestly in all states with slightly stronger growth in Kansas and the Mountain States.
Kansas saw 3% and 2% gains in the value of nonirrigated and irrigated farmland, respectively. It marked a 9% surge in the value of ranchland.
Western Missouri noted a 3% decrease in the value of nonirrigated cropland but a 4% rise in the value of ranchland/pasture.
The mountain states of Colorado, northern New Mexico and Wyoming report an 8% jump in the value of nonirrigated cropland and a 9% surge in the value of ranchland.
Nebraska reports a 1% decrease in nonirrigated and irrigated farmland values and a 5% boost in ranchland values.
Oklahoma reports a 4% rise in the value of nonirrigated cropland, a 10% boom in the value of irrigated cropland and a 5% rise in the value of ranchland.
The volume of farmland sales in the region was less than a year ago according to lenders. As in previous years, respondents report about 75% of all land purchases were made by farmers. The slowdown in sales was most pronounced in Missouri and Oklahoma. About 50% of lenders in Missouri and Oklahoma state sales volumes in the fourth quarter were down from a year earlier. In other states, only about 30% report lower sales and in Kansas the share was less than 15%.