Producers are less optimistic in the five-year outlook for farmland values
Farmers are less optimistic in long-term farmland values, according to the latest Purdue University/CME Group Ag Economy Barometer.
Purdue’s Jim Mintert says farmers expect prices to decline over the next five years.
“I think the decline we’re picking up reflects how much of an increase we’ve already experienced with respect to farmland values,” he says. “The most recent survey out there on a broad basis here in the corn belt is from Iowa State. The university said from November 2020 to November 2021 average farmland values in the state increased 29 percent.”
The Long-term Term Farmland Value Index declined 7 points to 145. The Short-Term Farmland Value Index fell 11 points to 142. Both indices have fallen 10 percent compared to their fall 2021 peak values.
Mintert tells Brownfield producer sentiment on farmland values has declined over the last three months.
“I don’t interpret the weakness we picked up with respect to farmland values as being bearish, but I think it is a reflection of the fact that given how far farmland values have come in the last year to year and a half, it does probably limit the upside going forward,” he says.
Farmers who expect farmland values to rise in the next five years said non-farm investor demand and inflation were some potential reasons.