As noted in the Federal Reserve’s latest Financial Stability Report, farmland values are at exceptionally high levels, though down from their 2016 peak. And price-to-rent ratios are at historic highs. At the same time, equity levels at many farms are higher than in the past.
We also see above-trend yields are helping to support many operators, though working capital at many farms has fallen along with incomes. Although the increase in problem loans associated with lower incomes has been modest, the Federal Reserve is monitoring the risk that has emerged in recent years.