Home > News > Farmland Values Surge on Crop Revenue Potential, Interest Rates

The value of farmland was one of the agricultural line items that was relatively unscathed by the tumult of the last 12 months; the land market had been under mild pressure from bearish grain markets for years, but a wholesale major decline in values never reached fruition like it did in other key ag markets. Now that grain prices have turned around — with nearby corn futures hitting new contract highs for the year on Thursday — the market has new strength. Improving credit conditions and low interest rates are contributing to what the Federal Reserve sees as a sustained general climb in land values. At the same time, loan volume in some Fed districts is increasing; that’s often a sign of economic strife, but right now, that volume is building because farmers are buying more machinery, constructing new grain storage and making other big-ticket purchases, not financing operating expenses. It’s a bullish outlook for large farm assets in 2021. See more from the Fed’s latest farmland market reporting.

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