The Federal Reserve Bank said second-quarter farmland values moved higher, but there were some differences between districts.
FEDERAL RESERVE BANK OF CHICAGO
As reported by the Illinois Farm Policy News, David Oppedahl, senior business economist at the Chicago Fed, explained in the AgLetter that, At 14%, the year-over-year increase in the value of District farmland for the second quarter was the largest recorded since 2013’s third quarter.
The AgLetter stated that, “Of particular relevance to the District were the June corn, soybean and hog prices, which were up 90%, 74% and 100% from a year ago, respectively.”
Agricultural land values were spurred by a surge in farm revenues and an influx of government payments. Moreover, historically low interest rates had a positive effect on such values, the report said.
FEDERAL RESERVE BANK OF KANSAS CITY
Nathan Kauffman and Ty Kreitman, writing in Thursday’s Ag Credit Survey from the Kansas City Federal Reserve, said, Alongside a sharp turnaround in agricultural economic conditions and support from government programs, farm income and loan repayment rates increased from a year ago at the fastest pace on record.
“With support from a strong farm economy and historically low interest rates, farm real estate values rose 10% from a year ago, which was the largest increase since 2013,” Kauffman and Kreitman said.
The 2021 outlook remained strong for most agricultural producers as commodity prices remained well above recent years, the Kansas City economists said. “Conditions in the cattle industry remained somewhat weaker, however, and drought continued to hinder conditions for farmers and ranchers….”
FEDERAL RESERVE BANK OF MINNEAPOLIS
In an article last week, “Farm finances held up into summer, despite drought concerns,” Joe Mahon pointed out that, “Solid commodity prices and persistent government aid benefited agricultural producers even as severe drought had a negative impact in many areas. ‘Overall condition of ag economy [is] good,’ said a Minnesota banker. ‘Concerned for livestock producers with heat and dryness. Input costs/feed costs going up. Crop farmers in good shape.’”
With respect to land values and cash rents, the Minneapolis Fed said, “After halting their half-decade slide and rebounding since late last year, land values and cash rents surged in the second quarter. Ninth District non-irrigated cropland values increased by 16% on average from the second quarter of 2020….”
CATTLE, BEEF RECAP
The USDA reported an average formula net live-basis price for all steers and heifers of $124.29 per cwt, and a formula dressed basis price of $197.67.
The USDA reported a formula base price for live FOB fed steers Monday of $124.17 per cwt and for FOB fed heifers of $123.86. FOB dressed steers went for $191.69, while FOB dressed heifers sold at $191.52.
The USDA choice cutout Monday was up $4.97 per cwt at $329.80, while select was up $5.53 at $303.55. The choice/select spread narrowed to $26.25 from $26.81 with 59 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.90 to $2.00 a bushel over the Sep futures and for southwest Kansas were unchanged at $0.70 over Sep, which settled at $5.64 3/4 a bushel, down $0.03 1/2.
No live cattle contracts were tendered for delivery Monday. Twenty-two heifer contracts and three steer contracts were retendered at two. Twenty-two heifer and three steer contracts were reclaimed at two.
The CME Feeder Cattle Index for the seven days ended Friday was $155.54 per cwt down $0.29. This compares with Monday’s Aug contract settlement of $157.20 per cwt, down $0.85.