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Are farmland values set to decline?

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Crop prices are at the lowest levels they’ve been in recent years.  That, combined with expectations that interest rates are expected to increase in the coming years leads Purdue University ag economist Michael Langemeir to believe the decade-long increase in farmland values may soon be over.

However, Langemeier, associate director of the Center for Commercial Agriculture says any decline should be slight and spread over more than one year.  Over each of the next three years – he says land values are looking at a 5 to 10 percent correction.

But Langemeier says farmers shouldn’t be too worried.  He calls it normal for a market that has been so strong to take a little breather.

In addition to decrease land values – he expects cash rents to also decline.  And if the current price projections hold, rates should also drop 5 to 10 percent in each of the next three years.

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