News

Survey: producers are less optimistic about short-term farmland values

Farmers are less optimistic farmland values will improve in the next 12 months, according to the latest Purdue University/CME Group Ag Economy Barometer.

Jim Mintert, director of the Purdue Center for Commercial Agriculture, says the percentage of farmers who expect to see lower farmland prices has been increasing for several months.

“If you go back to January of last year, only six percent of the people in the survey said they expected to see farmland values decline in the next 12 months. This month, 14 percent of farmers surveyed expect to see farmland values decline in the next year. And on the other side, a year ago 48 percent of the people in the survey said they expect to see farmland values rise in the next 12 months. This month that was down to 34 percent,” he says.

The Short-Term Farmland Value Expectations Index, sentiment regarding expectations over the next 12 months, declined four points to a reading of 120. Compared to last year, this month’s short-term index was down 22 points, a decline of 15 percent.

The Long-Term Farmland Value Expectations Index, a five-year outlook, rose slightly to a reading of 142. According to the Barometer, the long-term index has declined two percent over the last year as producers maintain a more optimistic long-term than short-term view of farmland values.

He tells Brownfield producer sentiment regarding farmland values in 2023 will likely depend on, “what takes place with farm incomes. It’s also going to be interesting to see the impact of higher interest rates on farmland values going forward.”

Among producers who expect to see farmland values rise over the next five years, the top two reasons for their optimism continue to be non-farm investor demand and inflation, chosen by 63 percent and 23 percent of respondents.

The Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.