Farmland is seeing double. Double digits in its value, that is.
Upskie daisies: Farmland values increased a whopping 22% during 2021, and ag bankers are saying “they’re not done here.”
Iowa alone has increased 30% over the past year. Putting this in perspective – the last time farmland values increased this much was in 2011.
According to the Federal Reserve Bank of Chicago, from Jan. 1, 2021, to Jan. 1, 2022, the percent changes in dollar value of good farmland for these five states were:
- Illinois: +18%
- Indiana: +22%
- Iowa: +30%
- Michigan: +19%
- Wisconsin: +12%
Can you take me higher: The increase was aided by low interest rates, subsidies, strong commodity prices and high corn and soybean yields last year. Specifically, corn yields rose 9.4% and soybeans rose 8%.
Up, up and that’s where they’ll stay: Farmers got some nice profits in 2021, but in 2022, the rise of input costs and increased cash rents could hinder profits. However, even with these risks, experts say the ag sector should be well positioned with support from “strong balance sheets, high agricultural commodity prices and sharp gains in farmland values.”