Farmland values and cash rents were down for the third quarter of this year (relative to the previous quarter), according to the latest Agricultural Finance Monitor, published by the Federal Reserve Bank of St. Louis.

Despite declines in farmland values and cash rent, farm income rose modestly across the District served by the Bank.

The survey for the report was conducted Sept. 11 through Sept. 30, 2013. The results are based on the responses from 47 agricultural banks within the boundaries of the Eighth Federal Reserve District.

The District comprises all or parts of the following seven Midwestern and Mid-South states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. 

Because these initial data are not adjusted for any seasonal irregularities (should they exist), users are cautioned to interpret the results carefully. In particular, users are cautioned against drawing firm conclusions about longer-run trends in farmland values and agricultural lending conditions. 

Likewise, because the number of responses from each of the four zones in the District has been relatively small, entailing a higher-than-normal margin of error, we have decided to discontinue publishing zone-by-zone results. The results now refer to the entire Eighth District

Farmland values

Values for quality farmland across the District saw a decrease of 6 percent from the second-quarter average. Values averaged $5,332 per acre in the third quarter of 2013, down from $5,672 per acre in the previous quarter. 

Despite this decline, quality-farmland values remain 9.1 percent higher than at the same point last year.

Looking forward, “Bankers expect further erosion in District quality-farmland values over the next three months with an index value of 88,” stated the report.

The report uses variables based on diffusion index methodology, where index values of 101-200 indicate higher-realized (or expected) income — based on survey responses — than a year ago, while index values of 0-99 indicate lower-realized (or expected) income than a year ago. A value of 100 indicates the same as a year ago.

According to the survey, the value of pastureland averaged $2,377 per acre in the third quarter, a gain of 1.4 percent over the past four quarters.