Famland Values And Demand Continues To Rise

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

Farmland values across the country climbed this year and hit record levels despite challenges like rising interest rates and extreme weather. That’s according to recently released data from the federal government.

The USDA’s annual land values study found farm real estate values increased 7.4 percent over the past year. And the Federal Reserve Banks of Chicago and Kansas City reported nine and seven percent increases respectively.

Eric Sarff is president of Murray Wise Associates, a farm real estate company that’s completed transactions in 43 states over its 25-year history. He shed some light on what his team has seen on the ground over the past year.

Sarff… “We've seen the demand continued to be strong for farmland. This last year really across all regions in the country prices have continued to remain strong even though we're a little bit different environment now than we were a year ago with both higher interest rates and lower commodity prices. I think when interest rates started to go up, we thought we might see a little bit more of a pullback than we have. But I think really what caused demand to remain strong is that there's a lot of cash buyers out there, so the interest rates don't affect those buyers quite as much, and also there's a lot of buyers that may have land already paid off or loans that are at a lower rate, so that gets spread across the entire portfolio, higher interest rates do not affect them quite as much as you might think. So, really just the continued demand for farmland remains strong.”

You can access the latest Land Report at www.MurrayWiseAssociates.com.