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An outlook on land values

h2013_Chris_Hurt_AFAN

An ag economist says overall – land values are on the decline even though there have been some surprisingly high land sales recently.

Chris Hurt with Purdue University says if farmers are positioned well – farmland is a really good long-term investment.  “You’re going to have people that still have a strong financial position and are willing to say now is the time that piece of land is available, it fits into our operation, and we want that for the long run,” he says.  “Not just for the next two or three years.”

He tells Brownfield another reason some farmland sales haven’t declined significantly is because the market hasn’t clearly signaled where it is headed.

But, Hurt says a 2015 Purdue survey indicated the farmland market is heading in a negative direction.

He expects that to continue for multiple years.  “Maybe something out around the end of this decade is when we would tend to expect to have worked through an adjustment to this more moderate return time period,” he says.  “And the higher and more normal interest rate period we think we’re coming in to.”

Earlier this week the Federal Reserve increased interest rates for the first time in nearly a decade.

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