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(Updates with state statistics starring in fifth paragraph.)
Feb. 15 (Bloomberg) -- Record cropland values in the U.S. Great Plains are spurring more farmland sales as absentee owners cash in on an agricultural boom, according to the Federal Reserve Bank of Kansas City.
Lenders in the Federal Reserve region that includes all or parts of seven states in the central U.S. said cropland prices rose 25 percent in 2011 and ranchland increased 14 percent, according to a survey released by the bank today. Farmers remained the main source of purchases, buying 73 percent of farmland sold. Higher values translated into more expensive rents, straining profits for tenant farmers, the Fed said.
“Robust bidding by farmers spurred record land values, which enticed more landowners to place farmland up for auction,” Jason Henderson and Maria Akers, economists for the Kansas City Fed, said in the report.
Farm profits in 2011 reached a record $98.1 billion and will total $91.7 billion this year, the second-highest, the U.S. Department of Agriculture said this week in a report. Agricultural exports surged 27 percent to a record $137.4 billion in the year ended Sept. 30 and will fall 3.9 percent to $132 billion this year, the government said in November.
Nebraska had the biggest annual gains in farmland values, up 38 percent in non-irrigated land prices, 36 percent in irrigated land and 21 percent in ranchland. Oklahoma had the smallest gains, including a 6.9 percent rise in ranchland values. The bank also said spending on farm equipment and machinery rose in the fourth quarter as farmers took advantage of federal tax rules that encouraged capital improvements.
The Kansas City, Missouri-based bank’s quarterly survey included responses from 253 banks involved in agricultural lending. The region includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.
--Editors: Daniel Enoch, Tom Galatola.
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