Agricultural real estate values in the Kansas City Federal Reserve district declined slightly in the first quarter of 2025, and credit conditions deteriorated further, said Kansas City Federal Reserve Bank Economist Ty Kreitman, in a Bank report.
The Kansas City Federal Reserve district includes Wyoming Colorado, Kansas, Oklahoma, Nebraska, northern New Mexico and western Missouri.
FARMLAND VALUDS DIP
Lenders in the region reported the average value of non-irrigated farmland declined about 2% from a year ago, Kreitman said. Land market conditions varied in some states, but in aggregate, values declined slightly following a moderation in farm incomes over the past year.
Alongside subdued economic conditions, farm loan repayment rates declined, demand for financing grew and instances of carryover debt and loan restructuring increased notably from a year ago, Kreitman said. Deterioration in farm finances was most pronounced in areas more dependent on crop revenues while strong cattle prices continued to support conditions in some parts of the region.
AG ECONOMY SUBDUED
The agricultural economy remained subdued through early 2025 alongside weak crop prices, he said. The results of the Survey of Agricultural Credit Conditions were captured in late March, ahead of recent distribution of assistance payments from the Emergency Commodity Assistance Program, which could improve liquidity for some producers.
Looking ahead, however, relatively low crop prices are likely to continue weighing on financial conditions in the sector and further pressure credit conditions, Kreitman said. Farm loan interest rates also remained higher than recent averages, which could pressure land markets and make financing costs particularly challenging for more highly leveraged borrowers.
Farm real estate values in the Kansas City district declined slightly in early 2025, Kreitman said. According to survey respondents, the value of non-irrigated farmland in the district was about 2% less than a year ago in the first quarter, and irrigated land values declined about 4%.
The value of ranchland was about 1% higher, and cash rents on all types of land were unchanged, he said.
Similar to the previous quarter, changes in values varied across states and types of land, Kreitman said. The value of non-irrigated land declined slightly in Kansas, Missouri and Nebraska but increased modestly in Oklahoma and the Mountain States. All Nebraska land types were at least 5% less while values in Oklahoma increased for all types.
Farmland markets softened alongside further moderation in the farm economy over the past year, but valuations remained strong, he said. The value of non-irrigated farmland eased modestly from record highs following two years of declines in US net farm income.
Yet average farmland values remained more than 50% higher than in 2020 and 165% higher than in 2010, Kreitman said.
CTTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $220.35 per cwt to $227.53, compared with last week’s range of $216.84 to $222.23 per cwt. FOB dressed steers, and heifers went for $342.45 per cwt to $357.95, compared with $336.28 to $357.17.
The USDA choice cutout Thursday was up $0.54 per cwt at $349.90 while select was up $3.33 at $339.18. The choice/select spread narrowed to $10.72 from $13.51 with 65 loads of fabricated product and 12 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $380.30 per cwt, and 50% beef was $119.36.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.15 to $1.25 a bushel over the Jul corn contract, which settled at $4.48 1/2, up $0.03.
The CME Feeder Cattle Index for the seven days ended Wednesday was $302.17 per cwt, down $0.24. This compares with Thursday’s May contract settlement of $296.17, down $3.40.