Strong commodity prices are creating opportunities for U.S. farmers to profit despite the risks posed by drought and higher production costs, said the Ag Finance Update by the Kansas City Federal Reserve Bank.
Farmland prices surged an average of 20% in the Farm Belt during the summer as buyers shrugged off sharply higher interest rates.
“Demand for farmland has remained strong alongside strength in the farm economy but the acceleration in values over the past year has shown signs of easing in recent quarters,” said the monthly Update. The 20% increase for non-irrigated cropland during the third quarter — July, August and September — was the smallest since early 2021.