Changing Economic Fundamentals Put Pressure on Farmland Values

by Brent Gloy

In our last post we examined some of the trends in farmland values around the country. These trends indicated that farmland prices were likely heading lower in many regions of the country. This is likely the most true in the Corn Belt where grain prices have been under substantial pressure. The output price pressure has been met with stiff resistance in input prices creating a significant margin squeeze. One way that this squeeze may alleviate is with a reduction in fixed costs, most notably cash rents and farmland prices.  Indeed, recent survey results from Iowa State indicate this process is underway.  Continue reading

Farmland Values: Are They Really Falling?

Farmland

by Brent Gloy

In our 2014 year in review we noted that 2014 might go down as the year that farmland values and rents stopped shooting higher. At that time the reports on farmland values were a bit mixed with the majority showing a slight softening in the market. Today, crop prices have continued to drift lower.  We thought it would be a good idea to attempt to summarize some of the land market data from around the country.  In doing so it appears clear that land values are softening throughout much of the Midwest.  The obvious questions that everyone are asking is how much have they fallen and how much further might they fall?

Continue reading

The 9 Questions Facing Production Agriculture in 2015

414736573_0e91a50569_o

by Brent A. Gloy and David A. Widmar

As the New Year begins we thought that it would be useful to put together a list of some of the things that we will be watching in the coming year. This list has been shaped by the questions we have been asked as we’ve traveled around the country this fall and winter. Without a doubt, 2015 will be an exciting year.  Below is a list of 9 questions we see production agriculture facing in 2015 and some of our thoughts on how these issues might unravel as the year unfolds.

1. What does ag profitability look like for 2015? 2014 was a financial roller coaster in the grain markets. Commodity prices fell hard going into harvest and then surprised with a late fall rally. When the Purdue University Crop Budgets initially came out in September, significant losses per acre were estimated. Going into 2015, commodity prices will be on the top of everyone’s mind

Continue reading