Farmland values ​​still high | Hoosier Ag Today

“Nothing less than extraordinary.” So Farmers National Company describes the agricultural land market of the last five years.

According to the company, increases in property values ​​have been seen across all types of land in all regions of the country. Strong commodity markets, moderate interest rates, buyer demand and an overall healthy agricultural sector have also contributed to the growth in property values ​​during this period.

“Well, right now we’re at what you would still call an all-time high for U.S. farmland. We’ve seen a really rapid increase here over the last three years that’s now starting to level off due to a variety of factors. But yes, we’re really at an all-time high,” said Jay VanGorden, Farmers National Company’s area sales manager for the eastern region, including Indiana, Michigan, Ohio and Kentucky.

If you’re considering selling, he said things are looking good now and for the next few months.

“If you want to sell, now would be a good time in the next six months. The peak selling season is usually late summer, early fall and the end of the calendar year because that’s when the crops are being brought in, leases are expiring and from that perspective the buyer can gain control of the land the quickest,” he said.

For potential buyers, the situation looks different – ​​also due to the current interest rate level.

“Interest rates are definitely a negative factor for buyers, as is the decline in grain markets to 3-4 year lows in recent weeks for farmers. These factors, coupled with inflation, make buying a little more difficult,” he explained. “You’re probably going to want to have at least a portion of the purchase price, a pretty decent portion of the purchase price, in cash to be able to really think about buying a property now.”

However, VanGorden pointed out that while it is currently more difficult for buyers, many of the properties for sale have high value.

“Right now we’re seeing pretty stable prices for really high-quality, proportionately cultivable land,” he said. “Less productive farms that are on less cultivable land, say 60, 70 percent, or on lower quality soils, poorly drained farms, have probably lost 5 to 10 percent in the last 12 months.”

Since farmers make up the largest share of land buyers, according to Farmers National Company, profitability in agriculture will have the greatest impact on the future value of land.