KANSAS CITY, MO – Farmland values surged in the third quarter according to Federal Reserve Surveys of Agricultural Credit Conditions. The value of nonirrigated cropland increased by 12% or more in all participating Districts. The rapid increase was also consistent across most states, with annual increases of more than 20% in some areas.
Supporting farm real estate markets, interest rates on farm loans remained at historic lows and strong farm finances drove further improvement in agricultural credit conditions.
Despite persistent concerns about increases in input costs, agricultural lenders expected farm income and credit conditions to remain strong through the end of the year alongside elevated commodity prices. The accompanying surge in farmland values has bolstered farm balance sheets and provided additional support to the sector. Alongside prospects for further strength in commodity markets, the outlook for farm finances and agricultural land values through the end of 2021 remained strong.
