St. Louis Fed: Drought will have big impact on farm income
This summer's drought has significantly lowered expectations for farm income in the third quarter, according to a new agricultural finance survey launched by the Federal Reserve Bank of St. Louis.
Published: Sep 11, 2012
The survey, conducted from June 15-June 29, 2012, was based on the responses of 88 agricultural banks located within the boundaries of the Eighth Federal Reserve District.
Except for the Memphis zone, lenders across the District expected third quarter 2012 farm income and capital expenditures to be significantly lower than third quarter 2011.
Meanwhile, both the value of nonirrigated cropland (or quality farmland) and the value of ranch and pastureland in the Eighth District were expected to remain the same, or rise slightly, over the next three months. Lenders estimated that District quality farmland values averaged $4,705 per acre in the second quarter, with ranch and pastureland averaging $2,349 per acre.
By zone, quality farmland values averaged $2,878 per acre in the Little Rock zone; $4,504 per acre in the Louisville zone; $2,900 in the Memphis zone and $5,835 per acre in the St. Louis zone. Ranch and pastureland averaged $1.918 per acre in the Little Rock zone; $2,464 in the Louisville zone; $1,717 per acre in the Memphis zone and $2,691 per acre in the St. Louis zone.
Across the District, gains in quality farmland prices over the next three months were expected outpace gains in ranch or pastureland prices, except in the Louisville zone, where gains in ranch and pastureland were expected to be higher than quality farmland gains.
The Eighth Federal Reserve District comprises all or parts of the following seven Midwest and Mid-South States: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. It is broken into four zones: Little Rock, Louisville, Memphis and St. Louis. Southern Illinois is part of the St. Louis zone.
USDA sees higher Illinois cash rents
In a related report, the Illinois Ag Statistics Service issued its annual cash rent report for Illinois for 2012.
Sangamon county has the highest reported average cash rent in the state at $324 per acre. The other counties with average reported rents over $300 are Macon ($316), Logan ($313), and Christian ($309). These four counties make up the highest reported non-irrigated rents in the state and in the country.
While there were some counties that saw average rents decrease or remain the same as 2011, statewide, cash rents increased by nearly 16 percent.
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