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Oklahoma Agricultural Land Value Update Roger Sahs, Extension Specialist OSU Department of Agricultural Economics West-Northwest Tracts 171 Size 250 $/Acre $1310 % Chg +5.2 North Central Tracts 112 Size 170 $/Acre $1608 % Chg +6.5 Northeast Tracts 286 Size 284 $/Acre $1634 % Chg -3.0 East-Northeast Tracts 33 Size 195 $/Acre $1828 % Chg -6.0 Panhandle Tracts 39 Size 595 $/Acre $809 % Chg +22.1 State Averages Tracts 1114 Size 257 $/Acre $1468 % Chg +2.1 Southwest Tracts 167 Size 214 $/Acre $1172 % Chg +12.6 South Central Tracts 101 Size 237 $/Acre $1574 % Chg -2.2 OK Land Values by Region, 2012 Southeast Tracts 205 Size 214 $/Acre $1548 % Chg +4.6 Recent Trends in Oklahoma Land Values 2012 District $/ac One Year Change 3 Year Change Percent Change Panhandle 809 22.1 63.0 West-NW 1310 5.2 31.5 Southwest 1172 12.6 25.9 North Central 1608 6.5 22.3 South Central 1574 -2.2 7.3 Northeast 1634 -3.0 2.9 East-NE 1828 -6.0 3.5 Southeast 1548 4.6 14.5 OK Cropland 1566 10.8 32.8 OK Pasture 1512 -0.5 9.5 Oklahoma 1468 2.1 14.1 Source: www.agecon.okstate.edu/oklandvalues Oklahoma Cropland vs Pastureland Prices Upward but not steady climb in values. “Boom to Bust” was only 30 years ago. Major increase in values in recent years. Source: www.agecon.okstate.edu/oklandvalues Oklahoma Cropland and Pastureland Prices Nominal vs Inflation Adjusted (base year 2000) Cropland Pasture Source: www.agecon.okstate.edu/oklandvalues 1973-1975 Average Value Tracts >= 40 Acres and <= $3000/Acre Source: www.agecon.okstate.edu/oklandvalues 2010-2012 Average Value Tracts >= 40 Acres and <= $6000/Acre Source: www.agecon.okstate.edu/oklandvalues Land prices going ahead… • Changes in the environment – – – – – Farm Bill Domestic economy Global economy Elections/policy Interest rates • Recreational uses – Wildlife habitat, wildlife population • Development uses – Population growth – Per capita income • Agriculture – – – – – Input prices Cattle, wheat/feedgrain prices Yields Efficiency, productivity Continued drought Key Land drivers looking ahead… Recent commodity prices and farm incomes Interest rate levels Financial health of current buyers $8 2.00 $7 1.75 $6 1.50 $5 1.25 $4 1.00 $3 0.75 $2 0.50 $1 0.25 $0 0.00 2000 2001 2002 2003 2004 2005 2006 Net farm income 2007 2008 Wheat Price Source: ERS and NASS 2009 2010 2011 2012 $ in Billions $/bushel Oklahoma Wheat Price and Net Farm Income Source: KC Federal Reserve Bank, July 2013 Financial Strength 2013 Balance Sheet of the U.S. Farming Sector (forecast) Total Farm Assets: Assets: $3.010 trillion Total Farm Debt: $308 Billion Total Farm Equity: Equity: $2.702 trillion Debt‐to‐Equity Ratio: 11.4 Low! Debt‐to‐Asset Ratio: 10.2 Low! Bottom-Line: Strong financial fundamentals for the Ag sector. Minimal Debt Leverage and Low Financial Stress! Source: Economic Research Service, August 2013 Source: KC Federal Reserve Bank, July 2013 Source: KC Federal Reserve Bank, July 2013 www.agecon.okstate.edu/oklandvalues Resources • Agecon.okstate.edu/oklandvalues • Kansas City Federal Reserve Bank – http://www.kc.frb.org/ – Choose RESEARCH & DATA, then Economic Review or Agricultural Credit Survey • USDA Ag Land Value Data and Reports – http://www.nass.usda.gov/Charts_and_Maps/Land_Value s_and_Cash_Rents/index.asp