Company: AGM-PH
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000845877-25-000204
Chunk: 100

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 100
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 lower profitability for some agricultural subsectors. Land value survey data from the USDA shows a 4.3% increase in average farm real estate values from June 2024 to June 2025. Annual farm real estate value gains were highest in the Southern Plains (5.9%) and the Lake states (5.7%) and still strong but slowing in the Northern Plains (4.9%), the Southeast (4.7%) and the Corn Belt (4.0%). According to the survey data, California farm real estate average value increase 2.2% overall and 3.5% for cropland. 

Farmland value growth rates continued to moderate in the first half of 2025 in the face of continued higher market interest rates and stagnating prices for some commodities. The Farmer Mac Farmland Price Index Powered by Acrevalue® decreased 3% in first quarter 2025 relative to the same period last year. While basing this index on actual farmland transactions can lead to greater volatility, the underlying slowdown in farmland value growth is also supported by Federal Reserve data. The Federal Reserve Bank of Chicago AgLetter reported farmland values rose 1% in the Seventh District in first quarter 2025. This followed a 1% annual decrease in 2024, which was the first decline in 5 years. The Federal Reserve Bank of Kansas City reported that non-irrigated farmland values decreased 2% in the Tenth District in first quarter 2025. Farmland value growth rates have trended consistently lower in many Federal Reserve districts over the last several years, and could remain subdued in second half 2025. Lower prices for some commodities, an elevated interest rate environment, and concerns about water availability represent headwinds to farmland values, particularly in states like California. Despite these headwinds, a relatively low supply of available farmland in many regions and persistent demand for the asset class across a wide variety of investors have helped maintain balance in farmland transaction markets. 

While regional averages for farmland values generally provide a good barometer for the overall changes in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility in farmland values than state or national averages indicate. Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values that could result from external factors.

Markets and Weather

Exogenous factors facing farm and food producers