The housing market is hot right now and farmland seems to be following suit. Farmland prices are up anywhere from 5 to 15 percent over the last six months.
According to Farmers National Company, much of that increase has been since January.
Strong commodity prices combined with last year’s abundance of government payments has given farmers a chance to place higher bids on properties. Both the dollar and acre volume of land sales is up more than 60 percent from last year.
Another contributing factor is farm credit conditions.
A Federal Reserve survey shows that farm loan repayment rates are improving rapidly, bolstered by strength in the first quarter. Interest rates on farm loans are at historic lows, but the farm income is elevated, thus demand for farm loans is lower.
This is a significant improvement over recent years.
Related:
Farmland prices hit highest point in many years
It is a seller’s market for farmland right now, but less supply of good cropland
Ag Economic Insights discusses the trends to look for in the 2021 farmland market