Income is falling along with crop prices
It’s sticky not in the reach-down-and-touch-the-dirt kind of way, but in the way economists use the word.
And because it’s sticky, because farmers really like to own land, prices for Kansas crop land have remained strong this fall, even as the land’s ability to generate income is falling along with crop prices.
Farmland prices in Kansas rose an average of 17.1 percent per acre in 2014, compared to a year ago – nearly the highest increase of any state in the country, according to the U.S. Department of Agriculture.
Kansas crop and pasture land, in the USDA report, in 2014 averaged $2,000 an acre, twice what it cost in 2010.
The increase in farm land prices so alarmed former Kansas City Federal Reserve Bank President Thomas Hoenig that he issued several public warnings of a rising real estate bubble. He was worried about a repeat of a painful farm collapse akin to the early 1980s.
The USDA report was released in August amid a steep drop in the price of corn, milo, soybeans and wheat.