A survey published earlier this month in the Purdue Agricultural Economics Report shows farmland values and cash rents throughout the state rose slightly this year. Purdue Agricultural Economics Professor Craig Dobbins says the June 2018 Purdue Land Value Survey aims to give people an idea of what is happening in the farmland market.
The survey examines trends in farmland values and cash rents, while detailing factors impacting those prices. The survey says top quality, average quality, and poor quality farmland increased in value from last year by 1.6 percent, 2.1 percent, and 2.4 percent, respectively. Top quality farmland has an average value of $8,668 per acre, with average quality farmland at $7,072 and poor quality farmland at $5,407.
The report says the amount of farmland on the market and the rate of inflation are the two market factors positively influencing the cost of farmland. Some of the factors negatively influencing costs are crop and livestock prices, interest rates, and agricultural policy.
Dobbins adds recent changes to trade and tariff policy in the U.S. is making it more difficult to predict how certain agricultural economic factors are going to impact land values in the future.
"Production agriculture is always risky, but it has gotten really risky given the current events taking place," said Dobbins. "Production agriculture is highly dependent on export markets. To get a change in policy to one that is erecting barriers rather than reducing barriers is really a shift,” Dobbins said.
You can view the full report below: