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Several factors propping up farmland values

Firm demand and limited supply have buoyed farmland values in many parts of the Midwest.

Rod Hebrink, CEO of farm credit cooperative Compeer Financial, says the market has been relatively stable.

“We may be off 15 to 20 percent from the peaks, but there wasn’t a lot of land that traded hands at those levels.”

Compeer covers Minnesota, Wisconsin, and parts of Illinois.

He tells Brownfield another factor that has supported farmland values is underwriting standards that are much different compared to the 1980’s.

“A lot more cash went into the purchases of land over the last decade than 30 years ago (and) interest rates have remained low. They started to go up, with recent changes it looks like they’re going to be stable, or more likely heading back down.”

Hebrink points out the ag real estate market responds very quickly to large swings in interest rates.  He says the consistently low rates have helped sustain farmland values too.