The value of all types of farmland in the Central Plains surged more than 20% in 2021, according to the Federal Reserve Bank of Kansas City. The quarterly survey of ag bankers found the value of nonirrigated cropland exploded by 24%, lifting prices to record levels even after adjusting for inflation. Meanwhile, the value of irrigated cropland and ranchland surged 22% each boosted by the combination of strong farm income and favorable credit conditions.
The value of nonirrigated cropland jumped a staggering 31% in Nebraska, followed by a 25% boom in Kansas, a 24% surge in the mountain states of Colorado, northern New Mexico and Wyoming. Western Missouri reports a 17% increase followed by a 15% boost in Oklahoma nonirrigated cropland values.
“Lenders reported a mostly favorable outlook for agriculture in the district but cited the rise in input costs as a risk to the sector. Even with uncertainty around input costs, lenders expected favorable conditions in the economy to support farm finances and lead to further gains in farmland values in 2022,” the bank continues.
Farmland sales also increased alongside the surge in farmland prices. About 45% of bankers reported that the volume of farmland sales was higher than a year ago, the largest share since 2012.
Despite a higher volume of sales, farmers accounted for a somewhat smaller share of the total farmland purchased in the district, the bank notes. Farmers still accounted for more than 70% of farmland purchases in 2021. But unlike the prior period of strengthening farm income immediately after 2010, which saw farmers accounting for 80% of all purchases, the share of land purchased by farmers declined slightly to about 74%.
Nebraska Dryland Cropland Leads Explosion in Values
Percentage of Farmers Buying Farmland Slips