Farmland Values and Cash Rents: Declining Profits Point to Further Reductions

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by Brent Gloy

As we discussed in these May posts (1, 2) most indications are that prices for U.S. row crop farmland are now softening, bringing an end to a tremendous run of increases for farmland values. We thought it would be useful to take a look at how far farmland values have come and some different measures of farmland valuation in order to gain  insights into where prices might be headed. Continue reading

Input Prices, Corn Prices, and Farmland Values

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By Brent Gloy

The value of farmland is dependent upon expectations of the future revenue and the costs associated with the land. Expected earnings are difficult to accurately predict. For example, the income generated by farmers started rising well before farmland values shot up. As market participants began to realize that farm incomes might remain at elevated levels for some time, land values increased rapidly. Now, farm incomes are falling and one is left to wonder what the implications of these lower incomes are for farmland values. The answer will likely depend upon how market participants expect revenues and costs to adjust going forward.  Continue reading

The Trends of Farmland Ownership and Rental

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by David A. Widmar

Producers manage farmland by two means: ownership and rental. It’s fairly intuitive that younger producers, being more capital constrained, rely more on rented acres. Conversely, older producers, who have accumulated decades of equity, own more of the acres they manage. And while we know this anecdotally, we decided to look at the details behind the balance of owned and rented farmland and how the relationship has trended over time.

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