After several years of increases, farmland prices seem to be easing somewhat. While demand for quality farmland is still high, that demand for land has backed down somewhat.
“We’re at what I think on the land market is an if-then-but stage,” says Randy Dickhut, farmland specialist for Agricultural Economic Insights. “If grain prices stay low, if farm incomes stay low, if liquidity keeps decreasing, then farmer buyers are going to be more hesitant to be able to buy and bid up like they typically do.”
That slowing could change if government payments pick up again according to Dickhut. “If there are ad-hoc farm payments, price support payments that are coming because of the low incomes and high input costs, and if interest rates would come down, those types of things, then we’ll see some more support in the land values because the underlying income and outlook is better. But so we’re at if certain things happen, then this probably happens, but there’s a lot of uncertainty in wild cards.”
As President-elect Trump gets set for term number two, tariffs could impact the price of farmland. “If tariffs get imposed and start restricting our grain commodity exports for its farm income, that won’t be good for farm income and land prices overall, but if there are additional payments, like there were in 2019 and 2020, to have the liquidity that will help support incomes and stuff, so a lot of uncertainty right now,” according to Dickhut.
Story courtesy of NAFB News Service