Ag Informer – Land Prices Hitting Plateau?

The rapid run-up in land values caused farmland values to hit historic levels over the past two years. The dynamics are starting to shift, and as input prices and interest rates climb, while commodity prices appear to be in a free-fall, an increasing number of bankers and land appraisers warn farmland values could be set to plateau.

The latest Rural Mainstreet Index (RMI) from Creighton University bankers estimate farmland prices in their area rose 4.3% over the past year, but the momentum stops there. The same bankers expect farmland prices in their area to remain stagnant, forecasting 0% growth, over the next 12 months.

Iowa isn’t the only state seeing a slowdown. This past weekend in Vernon County, Mo., a 314 acre parcel of ground sold at auction for $4,950 per acre. The price was below what many in the area thought it would bring. Just five months ago, two large pieces of farmland in the northwest portion of the county brought $7,500 per acre.