Farmland values stable, but risks to outlook remain

Farmland values in the Federal Reserve’s Tenth District held steady in the fourth quarter of 2018 despite risks to ongoing stability. While demand for farmland remained relatively strong across the District, weaknesses in the crop sector continued to dampen the overall agricultural economy. Risks to the outlook for farmland values in the quarter included slightly higher interest rates and an uptick in the pace of farmland sales in states with higher concentrations of crop production. In addition, continued deterioration in farm finances and credit conditions could put further pressure on values for farm real estate. Looking into 2019, bankers’ expectations for farmland values were slightly weaker than a year ago.