Cedar Falls, Iowa (RFD News) — Market volatility, input costs and global uncertainty continue to influence farmland market trends.
Accredited Farm Manager Chad Hertz joined us on Wednesday’s Market Day Report to discuss the latest movements he is seeing in the farmland market.
In his conversation with RFD News, Hertz said land values have remained steady despite pressure from lower commodity prices and higher production costs. He said the market has shifted from the strong tailwinds seen several years ago, when cash was moving through the economy and commodity prices were stronger.
Hertz said fertilizer costs, global demand and geopolitical stability will be key factors to watch moving forward. He said farmland values have held strong, in part because there has not been a large supply of land coming onto the market.
Hertz also said there are reasons for optimism if supply chains become more predictable and global demand continues to improve.
While farmland values have remained resilient, input costs continue to pressure farm margins, and fertilizer markets are closely watching developments in the Middle East.
Fertilizer markets are showing signs of relief as tensions in the Middle East begin to ease, but industry leaders say it could take time for lower prices to reach growers.
The Strait of Hormuz carries roughly 40 percent of the world’s urea supply, making it a critical corridor for global fertilizer trade. While a peace deal has given the market some optimism, analysts say supply chains will need time to adjust.
Rob Mohr with Wilbur-Ellis said higher fertilizer prices have led some growers to scale back nitrogen applications.
“All inputs are continuing to be increasing in price, and yes, nitrogen being one of the main drivers, we are naturally seeing growers start to scale back. A lot of times growers, when they figure their nitrogen needs, will go ahead and figure on a farm average plus 10-15 percent, and we’re seeing this year a lot of growers just sticking with that farm average.”
Mohr said that approach can become a challenge when growing conditions improve and crops require additional nutrients later in the season.
“It’s thinking on your feet and making game-time decisions. Growers may have applied what they feel is enough at this time for their average yield, and then all of a sudden weather and those things change, and all of a sudden we have these ideal growing conditions.”
Mohr said growers can still manage input costs while protecting yield potential, but doing so requires flexibility and regular crop monitoring. He added that working with a trusted advisor can help producers make timely decisions throughout the growing season.
