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Farmers are less bullish about future farmland values

Producers are less bullish about future farmland values than a year ago, according to the latest Purdue University/CME Group Ag Economy Barometer.

Jim Mintert is the director of the Purdue Center for Commercial Agriculture.

“We’re starting to pick up some evidence of people being a little bit concerned that maybe we’ve seen farmland values rise pretty rapidly,” he says. “Another way of looking at that is to look at the actual raw responses to the question about what farmers think is going to happen to farmland values over the next five years. The percentage of people who expect to see farmland values decline over the next five years has been rising. It’s still a very small percentage. This month, 12 percent of farmers surveyed said that, but if you compare that to a year ago, it’s roughly triple the percentage of farmers expecting to see values decline.”

The Long-Term Farmland Value Expectations Index held steady at a reading of 144. Mintert says that’s down about nine percent from a year ago.

The Short-Term Farmland Value Expectations Index fell four points to a reading of 129. That’s down about 18 percent compared to a year ago.

He tells Brownfield, “both of those indices are still in what I would call positive territory, meaning that people are still somewhat optimistic about farmland values, but they are less optimistic than they were this time last year. We’re definitely starting to pick up a little bit of a change there, but overall, it’s still a very positive view of farmland values.”  

The survey found that among producers who expect farmland values to rise over the next five years, more than half chose non-farm investor demand as the primary reason for their optimism.