Farmland values continued to increase rapidly through the end of 2021. Alongside sustained strength in farm income and credit conditions, the value of all types of farmland in the Tenth Federal Reserve Bank District was more than 20 percent higher than a year ago. Lenders reported a mostly favorable outlook for agriculture in the district but cited the rise in input costs as a risk to the sector. Even with uncertainty around input costs, lenders expect favorable economic conditions to support farm finances and lead to further gains in farmland values in 2022. The possibility of weaker agricultural income and higher interest rates remain risks for farmland markets. Despite the risks, the agricultural sector appears to be well-positioned for the year ahead, supported by strong balance sheets, high commodity prices and sharp gains in farmland values. The Tenth District includes parts of Missouri and New Mexico, and all of Colorado, Kansas, Nebraska, Oklahoma and Wyoming.
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