Farmland Value

Do you want the good news or the bad news first? Good news it is. The average value of farmland in the midwest and western states has grown twenty-five percent in the past year, due mostly to lower interest rates and strong crop prices. That’s the most significant jump in the last thirty years, if not longer. Pretty amazing really with the multitude of hardships faced by most of the nation’s farmers this past year; seems like if it wasn’t flooding, it was so dry the trees were following the dogs around. But when the weather did cooperate, farmers did well. With the extra income made from higher corn and wheat prices this year a number of farmers turned around and purchased more land. Now for the flip side. Higher land prices are definitely going to make it more difficult for young farmers getting started. Plus, when land values go up property taxes go right up with them. And any drastic fall in land values could result in some farmers being upside down financially if they’ve borrowed against their land. Most seasoned farmers though learned from the farm credit crisis of the 80’s and have worked to keep their debt levels manageable. They will survive.