U.S. Plains Farmland Holds Value, But Market Soft -KC Fed
Feb 14 (Reuters) - Farmland values in the U.S. central and southern Plains held steady in the fourth quarter from the previous period, but the market tone is soft, and bankers expect weakness in the coming months, the Federal Reserve Bank ofKansas City said on Friday.
"Cropland values increased only modestly in the fourth quarter compared with the rapid pace of the past few years," the Kansas City Fed said in its quarterly survey of 226 farm bankers.
"Values rose only about 1 percent in the fourth quarter of 2013 despite fewer farms being for sale. Ranchland values actually dipped below third-quarter levels."
Even though farmland values remained higher than in 2012, the year-over-year gains of 7 percent to 9 percent was the lowest in more than three years, the bank said.
The bank's district, which includes Nebraska, Kansas, Oklahoma, Colorado and parts of Missouri, is the leading production area for bread wheat and a major producer of corn, beef, oilseeds and other farm commodities.
The survey results were similar to those issued for the Midwest on Thursday by the Federal Reserve Banks of Chicago and St Louis. But the outlook for farm returns in the Plains, where there is greater dependence on irrigation and vulnerability to drought, looks less rosy in 2014 and may have weighed on farmland values.
"A growing number of district bankers felt that farmland values had topped out and could retreat from current highs," the Kansas City Fed said.