Despite this summer's oppressive drought, farmland values are still soaring. Purdue University Extension agricultural economist Craig Dobbins told Agri-Pulse that at least two factors are at play: the drought is seen as a one-year event, with next year expected to be better, and crop insurance helped mitigate many farmers' losses.
Land values are increasing by double digits in some areas mostly because farm income is high and farmers love to buy land. The average farmland value increase ranged from a 26.7 percent increase in the Northern Plains to a 4.1 decline in the Southeast, according to the U.S. Department of Agriculture. The Corn Belt has the highest values, with land selling at about $5,560 an acre.
The continued increase in land value could be "a double-edged sword," Dobbins told Agri-Pulse, because it could prevent non-farmers from entering the industry. "For someone who is not in the farming business, it is going to be more difficult to get in and you are going to have to do it in some way that has not traditionally been done," Dobbins said. "You are going to need to be a clever entrepreneur, or very rich. It's not going to be impossible, but it is going to be extremely difficult."
Agri-Pulse is a weekly, Washington-based newsletter available by subscription; a free, four-week trial can be accessed here.
Land values are increasing by double digits in some areas mostly because farm income is high and farmers love to buy land. The average farmland value increase ranged from a 26.7 percent increase in the Northern Plains to a 4.1 decline in the Southeast, according to the U.S. Department of Agriculture. The Corn Belt has the highest values, with land selling at about $5,560 an acre.
The continued increase in land value could be "a double-edged sword," Dobbins told Agri-Pulse, because it could prevent non-farmers from entering the industry. "For someone who is not in the farming business, it is going to be more difficult to get in and you are going to have to do it in some way that has not traditionally been done," Dobbins said. "You are going to need to be a clever entrepreneur, or very rich. It's not going to be impossible, but it is going to be extremely difficult."
Agri-Pulse is a weekly, Washington-based newsletter available by subscription; a free, four-week trial can be accessed here.
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