by Stephen Donnell, SR VP Lending, Plains Land Bank, Amarillo, TX
Interest rates have been about as volatile as the commodity markets in recent months. Our long term interest rates have moved up and down over three-tenths of a percent since March. Some months, it appears the Fed’s increase in short term rates is pushing long term rates higher, only to see those rates fall back the next month. Very hard to predict. We have had a number of customers recently locking in some long term money to hedge against rising interest rates. That appears to be a sound strategy, especially if you can catch a dip in rates.
As to land sales, land prices and buyer interest, it just flat depends on where you are. Areas of the Panhandle have seen some softening of land values and there are farms for sale. In other areas, the values have not backed off much, and there are very few farms listed for sale. The “crash” in land values that some feared a couple of years ago has yet to materialize, and loan demand here at Plains Land Bank is running ahead of last year.