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Indiana farmland values likely to decline

An ag economist says higher interest rates and lower crop prices will likely drive down the value of Indiana farmland in 2016.  Purdue University’s Craig Dobbins says land values will be expected to fall more quickly in an economic environment of low return.  However, since there is limited available farmland on the market – Dobbins expects the values to fall slowly.

According to Purdue’s Land Value and Cash Rent Survey top-quality farmland declined more than 5 percent this year. He forecasts farmland values will drop five to 12 percent in 2016, after they nearly tripled in value from 2003 to 2014.  If interest rates begin to climb early next year – Dobbins says declines in farmland prices will likely be closer to the 12 percent range.

Cash rents also went down in 2015 – for the first time in 30 years – and Dobbins expects that to continue in 2016.