Farmland values appear steady in 2020

crop field with farmstead in distance
Low interest rates, federal farm payment support farmland values.

Bruce Sherrick, an agricultural economist at the University of Illinois, said he's seeing evidence that farmland values are increasing in major agricultural regions in the third quarter of 2020.

Sherrick, who spoke during a recent webinar hosted by USAgriculture titled, "Six Months In: How Has COVID-19 Affected Farmland & Agricultural Investment Markets," said the "I" states have seen reasonable performance. Farmland remains an attractive asset, he said.

What are others saying about land values and land rents?

Iowa farmland values have remained firm over the past six months. A recent survey conducted by the Iowa Realtors Land Institute in early September showed statewide land values unchanged from March.

Glen Fadeboe, owner of the farm real estate brokerage and auction house Fladeboe Land, told the Star Tribune a rise in corn and soybean prices, low interest rates, good yields, strong sugar beet prices and generous government assistance supported the land market. The firm sold two pieces of Minnesota farmland for more than $8,700 per acre in September.

A 2020 Purdue Farmland Value and Cash Rent Survey found that farmland prices across Indiana improved since the June 2019 survey. Between June and December 2019, top-, average-, and poor-quality farmland values increased by 5.5%, 5.0% and 8.7%, respectively; yet, between December 2019 and June 2020, top-, average-, and poor-quality farmland values posted modest declines of 1%, 1.7%, and 2.2%.

Researchers from the University of Illinois at Urbana-Champaign said farmland prices have not decreased due to federal farm aid and historically low interest rates.

In Kansas, good-quality farmland, especially irrigated land and land with recreation potential, continues to hold its value.

The average value of farm real estate was $2,170 per acre in Texas, an increase from a year earlier, according to data from the USDA Land Values Summary Report for 2020.

At the Farm Progress Virtual Experience, changes in land values and cash rental rates in the Corn Belt were discussed.

During 2020, Farm Bureau reported the average cash rental rate for cropland was $139 per acre, down $1 per acre from 2019, according to USDA's August cash rents survey.

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