A Lag Factor in Land Values

Land represents the largest asset on the balance sheet. American Farm Bureau Federation Economist Daniel Munch says farm real estate reached a record average of $4,350 per acre. “This is on a 4.3 percent increase over last year,” said Munch. “The prior year increase was five percent, and then going two years back, between 2021 and 2022, when we saw those record crop prices, there was a ten percent increase.” Interest rates have gone up, and farm income is declining. Despite that, FarmerMac Chief Economist Jackson Takach says farmland values remain strong. “When your supply is constrained, and there’s no impetus to sell, you end up with a very tight land market and pressure on land values,” said Takach. “That is starting to turn around, but it’s still early yet. There is a bit of a lagging indicator.”