Have Land Values and Cash Rents Finally Stabilized?

8th federal reserve district

The Federal Reserve branch located in St. Louis representing the 8th Federal Reserve District, recently published the results of its quarterly survey on agricultural credit conditions and general financial status for the 2nd quarter of 2014.

Quality Farm Land:

Overall, quality farm land values appear to have leveled off, or declined slightly, with a current value per acre of farmland across the 8th district of $5,473/acre.  The survey shows land down modestly (0.5%) from quarter 1 of 2014 and down 3.5% from where land values were in the 2nd quarter of 2013.  A large share of survey respondents expect quality farm ground to continue to decline in price over the remainder of 2014.


The 2nd quarter 2014 survey found the average sales price of pastureland across the district to be $2,313/acre.  This price is down 7.5% from quarter 1 of 2014 and down 2.5% from the 2nd quarter of 2013.  Like quality farm ground, expectations form survey respondents are that pastureland will decline further in the next quarter of 2014.

Cash Rents:

Despite the modest drop in the sales price of quality farm ground, cash rents increased from quarter 1 to quarter 2 of 2014 by 4.8% yielding an average rental rate of $191/acre.  At the same, time rent for pasture land fell modestly from $62/acre to $59/acre.  Overall, cash rental rates for the 2nd quarter of 2014 were higher than rental rates during the same period a year ago for quality farm ground, and slightly higher for pasture ground in the 2nd quarter of 2014 relative to the 2nd quarter of 2013.

There appears to be no consensus among those surveyed as to the direction of cash rental rates on quality farm ground for the remaining quarters of 2014. However, most believe that rental rates for pastureland will increase overall in the coming months.