A study from the University of Minnesota shows that prices for Minnesota farmland continue to escalate, but a survey of bankers across the rural Midwest finds that farm-related economic indicators have hit a five-year low.
The Pioneer Press has the story of a new statewide land survey finds prices climbed by 5 percent in the first nine months of 2013. Steve Taff, a University of Minnesota applied economist who tallies sales data on every acre of farmland in the state, told the newspaper the jump represents the highest increase in the study's history.
The average acre of Minnesota farmland sold for $5,071 during 2013, on an adjusted basis. Based on 161 land sales, farmland in south-central Minnesota sold for an average $8,204 an acre, up 7 percent. A decade ago, it was $2,370 an acre.
The increases did not occur in all regions of the state. In northwest Minnesota, the average price for an acre of farmland last year was down.
A U.S. Department of Agriculture farmer survey showed a 17 percent increase in Minnesota's land values between mid-2012 and mid-2013.
But the Omaha World Herald has the story of an updated survey from Creighton University, which regularly polls bankers for a Rural Mainstreet Index. The survey had responses from 182 bank executives in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming. Their answers produced a confidence index that suggests they expect a declining economy over the coming six months.
In the study, the farm and ranch land price index was the lowest since March 2009, and the farm equipment sales index was the lowest since May 2009. March was the fourth straight month that the two indexes have declined.
The bankers said they expect rent on farmland to increase by less than 1 percent this year, after several years of rapidly rising rents. The change reflects lower demand for farmland by purchasers, who had paid more for land in recent years. Rising interest rates are also expected to push down land prices and rents.