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Changing trends in ag land values, interest rates

Several Federal Reserve Banks provided land value and credit condition summaries from second-quarter ag lender surveys. It's tough to find a national trend, with local economic and weather conditions having a big impact. There may also be a change in interest rates blowing in the wind.
• Q2 2013 average farmland values in the Federal Reserve Bank of Chicago were up 17% from a year ago. However, the stellar year-over-year gains in farmland values across the five district states masked the comparative weakness of the quarterly results. District values were unchanged from Q1 2013, the first time there was no quarter-to-quarter change since 2009.
• Compared to a year earlier, 2013 Q2 farmland values also surged in the Federal Reserve Bank of Kansas City. With drought persisting across much of the district, farmland with access to irrigation posted the strongest gains, up 25% from a year ago. While most bankers expected farmland values to remain at current levels, an increasing number believe values may have peaked.
• The lingering drought and poor crop-producing weather conditions continue to keep a lid on ag land value increases in the Federal Reserve Bank of Dallas. Q2 2013 cropland (irrigated and dryland) values rose slightly from Q1. Ranchland saw the largest increases. The vast majority of bankers anticipate land values will be stable over Q3.
• Compared to a year earlier, average 2013 Q2 values for quality farmland increased in much of the Federal Reserve Bank of St. Louis. And, in contrast to other parts of the Heartland, ag lenders expect the increase to continue in Q3, along with increasing cash rents.