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Producers less optimistic farmland values will improve in the next year

Farmers are less optimistic about farmland values will improve in the next 12 months, according to the latest Purdue University/CME Group Ag Economy barometer.

Jim Mintert is the survey’s principal investigator and director of Purdue’s Center for Commercial Agriculture.

“This month, 19 percent of the people in the survey said they think farmland values are going down in the next 12 months. That was up compared to 14 percent who felt that last month. If you go back a year ago, it was only 9 percent. If you go back two years, it was only 6 percent of the people in the survey that thought farmland values would go down in the next 12 months,” he says. “And on the flip side, the percentage expecting higher farmland values this month was 29 percent. That’s the lowest we’ve had on that for almost three years. One year ago, that was 54 percent and two years ago was 63 percent, which was the peak. So, you can kind of see that change in perception. It’s not that overwhelmingly people expect farmland values to go down, but it’s a weaker environment than what we’re looking at a year ago and two years ago.”

 The Short-Term Farmland Value Expectations Index fell 13 points to a reading of 110, the weakest reading since August 2020. Mintert says it has been declining over time. One year ago, the index had a reading of 145 and two years ago it was 157.

“You can pick up the change in sentiment, but as long as the index is above 100, more people expect farmland values to go up in the next year than expect it to go down,” he says.

He says producers remain more optimistic about the longer-term outlook for farmland values.

The Long-Term Farmland Value Expectations Index rose 3 points to a reading of 145. Among the producers who expect farmland values to rise in the next five years, the two most cited reasons for their optimism continue to be expectations for strong non-farm investor demand and inflation, chosen by 66 percent and 21 percent of respondents, respectively.

The Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.

Audio: Jim Mintert