Prices for irrigated cropland, and ranchland in Texas, the top US cotton and beef producing state, are near
record levels, the Dallas Federal Reserve said.
But bankers are downbeat on price prospects in the future, suggesting
a negative trend to come.
And ranchers remain under pressure from rising predation, as
wolves and bobcats threaten the future of the sheep and goat industry in the
far-west of Texas, according to one surveyed banker.
Rising land values
The Federal Reserve Bank of
Dallas, which covers Texas as well as parts of Louisiana and New Mexico,
reported that "real district ranchland and irrigated cropland values increased
this quarter, while real dryland values decreased".
"According to bankers who responded in both this quarter and
first quarter 2016, nominal district land values all rose year over year, with
irrigated cropland showing the strongest increase."
But bankers surveyed were downbeat on prospects.
"The anticipated trend in farmland values index remained
negative for a seventh consecutive quarter, suggesting respondents expect
farmland values to trend down in the coming months," the Dallas Fed said.
Premium for irrigated land increases
Irrigated cropland prices in the
region covered averaged $2,488.50 an acre in the first three months of 2017, the
second highest level on record, up 7.8% year-on-year.
This is just below the record
levels seen during July to September last year.
The premium of irrigated land to
dryland prices is now at its highest level since the first quarter of 2015.
Ranchland prices were also at their
second highest level on record, at $1,721.10 an acre.
The Dallas Fed warned of increased pressure from predation
on livestock in the Trans-Pecos region of West Texas.
"Livestock pastures were mostly in good condition, but
predators were seen as an increasing issue for ranchers."
"Predators continue to be a real problem for sheep and goat
producers and, because of that fact, many ranchers have just gotten out of the
business due to the cost of trying to combat the coyotes, bobcats and hogs,"
commented surveyed banker.
"It is an issue that actually threatens the sheep and goat
"Predators remain one of the main problems, including
coyotes, bobcats and even reports of gray fox issues, as well as the exploded
feral hog population and their destruction of fences, waterings and pastures,"
noted another banker.
Farm economics remain constricted by low returns.
"There were scattered reports of producers paying out their
lines of credit, but in general, respondents noted a need for higher crop and
cattle prices," the Dallas Fed said.