According to the Federal Reserve Banks of Kansas City and St. Louis farmland prices in key agricultural regions of the U.S. have surged by more than 20% over the past 12 months. Demand for land remains high despite a decline in farm incomes. This increase marks the 9th consecutive quarter in which irrigated cropland values have risen by more than 20%. Cropland in Kansas, Nebraska, Missouri and Oklahoma jumped 25.2% from a year ago. In Arkansas, Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois prices for high quality farmland rose 20.6% over the previous year to $5,672 an acre on average. The reports from the two Federal Reserve banks are based on surveys of bankers who noted overall wealth in the farming sector, current low interest rates, and lack of alternate investment options as the drivers behind the price increases. Many bankers express that they believe that farmland prices may have peaked. Those that expect prices to fall express that they are expecting a decline of less than 10%.
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