DALLAS, TX – Land values have increased at least 10 percent over the past year across portions of Texas and Northern Louisiana, led by irrigated cropland, but the impacts of inflation are beginning to weigh on the overall economy according to the Dallas branch of the Federal Reserve.
Bankers in the Eleventh District responding to the first-quarter survey reported overall weaker conditions across most regions and noted that extreme drought is straining agricultural production.
Despite an increase in commodity prices, the bigger increase in input costs is tilting the scales away from the favor of producers, and concern about the future is leading to a decrease in demand for agricultural loans, as the loan demand index returns to negative territory after posting its first positive reading since 2015 last quarter. Loan volume decreased for feeder cattle loans, dairy loans, and crop storage loans compared with a year ago.
Cropland and ranchland values increased at least 10 percent year over year, with some segments seeing much higher increases, as the anticipated trend in farmland values index pushed to a new high in the first quarter, suggesting respondents expect farmland values to continue increasing at a robust clip.
(SOURCE: All Ag News)
