The price of Kansas farm ground continues to soften – along with national farm ground prices – because of falling farm incomes and fewer bidders, according to brokerage Farmers National.
The good news for farmers is that crop prices all jumped between 4 cents and 18 cents on Tuesday as the U.S. Department of Agriculture lowered its earlier estimates on the U.S. corn and soybean crop. It also lowered its estimate on the amount of acreage planted for the upcoming wheat harvest.
The USDA reports that corn and wheat held in storage were greater than earlier estimated. Many farmers and grain buyers have held onto stocks because of low prices.
At the same time, the USDA on Tuesday raised its earlier estimates for Kansas’ fall harvest, with corn at 580 million bushels, up 2 percent from 2014; soybeans at 149 million bushels, up 6 percent from 2014; and grain sorghum at 282 million bushels, up 41 percent from 2014. The yield for soybeans was 88 bushels per acre, which tied a record set in 2009.
The price increases were welcome news to farmers who have seen more than a year of break-even – or worse – prices after five years of record profits. Falling farm incomes have weighed on land prices, which have started to fall from record prices.
The number of farmers looking to buy land remains strong, said Brock Thurman, a Kiowa-based vice president for Farmers National, but the number of non-farm investors has dropped as falling prices have cut the investment return. If non-farm investors could still get a three percent to five percent return on renting the land out, they might be interested in buying, but nearby farmers typically will outbid them.
“Most guys are trying to break even, with some in the red numbers,” Thurman said of farmers. “But they want to control acres because they’re eternal optimists and there’s always next year.”