Farmland values in wheat-growing parts of the US has grown faster than those in corn-growing areas last year, reflecting the relative fortunes of prices of the grains – and the return of rainfall.
The value of US farms overall has risen by 8.1% over the last year to an average of $2,950 per acre, the US Department of Agriculture said.
The rate of increase, a slowdown of 0.2 points on that reported for the year before, reflected an acceleration in ranchland - which appreciated by 11.1%, more than doubling its growth rate – overtaking a slowing cropland market.
The underperformance of arable land, of which price growth near-halved to 7.6%, tallies with the slide in corn, soybean and wheat prices over the past year, a factor which, while lowering margins for crop farmers, has improved prospects for livestock producers, who require grain for feed.
However, even among major arable areas there was a marked divergence in performance, with values in the Corn Belt growing by 8.4%, less than that in area where wheat makes up a bigger proportion of crops.
In the northern and central Plains – stretching from North Dakota, the top spring wheat growing state, in the north to Kansas, the biggest US producer of wheat overall – values rose by 16.3%.
And in the southern hard red winter wheat belt, prices in Oklahoma rose by 9.0%, and by 10.1% in Texas, also a major cotton-growing and cattle-ranching state.
The performance chimes with the relative performance of corn and wheat prices over the past year, with futures in the former tumbling by 28% in Chicago, where wheat has fallen by 22%.
It also appears to reflect the retreat in drought in many wheat-growing areas, where the worst-in-a-generation dryness which affected the US in 2012 remained a threat into this year.
In Texas, for instance, while 58% of the state remains in drought, that is down from 88% a year ago.
Texas, cropland prices rose 10.5% in the latest year, a big improvement from the 4.4% decline seen the year before.
Furthermore irrigated and non-irrigated cropland rose at identical paces in the latest year, compared with a marked divergence a year before, when watered land gained 2.4% while land without access to moisture fell 5.7%.
The performance of irrigated and non-irrigated cropland also converged in Nebraska, Oklahoma and in Kansas, where overall cropland values rose particularly swiftly, by 17.1%.