The ramp up of land prices over the past several years is not perceived as a bubble ready to burst, at least in the near term, by a Farm Credit Services banker. Jeff Swanhorst is executive vice president and chief credit officer for AgriBank. He says the concern lies with those extremely high land values that are popping up.
He tells Brownfield Ag News, “They’re typically much higher than other land is selling in a geographical area. And, in those cases, I believe those prices are too high. Those sorts of sales are unusual but there are some of them out there.”
Swanhorst tells Brownfield there are two states, in particular, to keep an eye on. He says, “There’ve been some very high land sale values in northwest Iowa and there have been some other sales in other parts of Iowa and Illinois that are probably the highest values we’ve seen on a per acre basis.”
Swanhorst says while the 2012 drought is having an impact on mainly livestock producers, the growth in Farm Credit loan volume right now has been from things like farmers buying more ag real estate.
The AgriBank District ‘stretches from Ohio to Wyoming and from Minnesota to Arkansas.’