Oklahoma Agricultural Land Value Update

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Oklahoma Agricultural Land Value Update Roger Sahs, Extension Specialist OSU Department of Agricultural Economics

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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 - PowerPoint PPT Presentation

Transcript of Oklahoma Agricultural Land Value Update

Page 1: Oklahoma Agricultural Land Value Update

Oklahoma Agricultural Land Value Update

Roger Sahs, Extension SpecialistOSU Department of Agricultural Economics

Page 2: Oklahoma Agricultural Land Value Update

OK Land Values by Region, 2012

PanhandleTracts 39Size 595$/Acre $809% Chg +22.1

West-NorthwestTracts 171Size 250$/Acre $1310% Chg +5.2

North CentralTracts 112Size 170$/Acre $1608% Chg +6.5

NortheastTracts 286Size 284$/Acre $1634% Chg -3.0

East-NortheastTracts 33Size 195$/Acre $1828% Chg -6.0

South CentralTracts 101Size 237$/Acre $1574% Chg -2.2

SoutheastTracts 205Size 214 $/Acre $1548% Chg +4.6

State AveragesTracts 1114Size 257$/Acre $1468% Chg +2.1

SouthwestTracts 167Size 214$/Acre $1172% Chg +12.6

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District2012 One Year

Change3 Year Change

$/ac 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

Recent Trends in Oklahoma Land Values

Source: www.agecon.okstate.edu/oklandvalues

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Oklahoma Cropland vs Pastureland Prices

Source: www.agecon.okstate.edu/oklandvalues

Upward but not steady climb in values.

“Boom to Bust” was only 30 years ago.

Major increase in values in recent years.

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Oklahoma Cropland and Pastureland Prices Nominal vs Inflation Adjusted (base year

2000)

Source: www.agecon.okstate.edu/oklandvalues

Cropland

Pasture

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1973-1975 Average ValueTracts >= 40 Acres and <= $3000/Acre

Source: www.agecon.okstate.edu/oklandvalues

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2010-2012 Average ValueTracts >= 40 Acres and <= $6000/Acre

Source: www.agecon.okstate.edu/oklandvalues

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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

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Key Land drivers looking ahead… Recent commodity prices and farm

incomes Interest rate levels Financial health of current buyers

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$/bu

shel

$ in

Bill

ions

Oklahoma Wheat Price and Net Farm Income

Source: ERS and NASS

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0

$1

$2

$3

$4

$5

$6

$7

$8

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

Net farm income Wheat Price

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Source: KC Federal Reserve Bank, July 2013

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Financial Strength

2013 Balance Sheet of the U.S. Farming Sector (forecast)

Total Farm Assets: Assets: $3.010 trillionTotal Farm Debt: $308 BillionTotal 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

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Source: KC Federal Reserve Bank, July 2013

Page 14: Oklahoma Agricultural Land Value Update

Source: KC Federal Reserve Bank, July 2013

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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_Values

_and_Cash_Rents/index.asp