Farmer Mac says interest rates could go lower
A senior analyst with Farmer Mac says farmers are benefitting from low interest rates which have a direct impact on real estate.
Jackson Takach, at the AgriPulse Ag Outlook Forum, says interest rates are among the lowest ever and it’s hard to see them going lower. But, he says it’s possible with the intense competition between lenders and borrowers in farm real estate.
“There’s a lot of opportunities, I think, to get some lower interest rates across the board in the next six to 12 months but it’s going to be a lot smaller than some of the more dramatic decreases we’ve seen over the last, say 12 to 24 months.”
Because of the low interest rates, he says it’s been a great year for farm real estate.
“In total, it’s about a seven-percent gain over 2020 numbers. That’s after several years of sort of ‘steady Eddie’ gains across the farm real estate landscape.”
Takach says the biggest gains are in the heart of the Midwest. In Missouri, for example, the growth has been as high as 8-and-a-half percent, year over year.
He says there are huge gains in the drought-affected west for land that has water while there have been modest gains in the Southeast.
On the flip side, he says rents are inching up, especially in the Corn Belt.
Takach was a panelist at the Ag Outlook Forum sponsored by AgriPulse and the Agricultural Business Council of Kansas City.