The value of farm land continued to rise in the second quarter even though farm incomes fell, according to a survey by the Kansas City Federal Reserve Bank.
Most agricultural bankers expect land values to remain at current levels during the third quarter.
The gains came from strong demand from farm and non-farm buyers and a limited supply of land for sale, even though lower crop prices during the spring trimmed farm incomes.
Wheat prices, however, have risen sharply in the last two months, with a cash price around $6 a bushel at local grain elevators, increasing the likelihood of strong farm incomes in Kansas this year.
Cropland posted the largest value gains compared to last year. Sustained profits from livestock and improved pasture conditions pushed ranch land values just over year-ago levels.
The reserve district includes Kansas, Colorado, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico, and the western third of Missouri.