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Slightly lower cropland values forecast

An extension educator says cropland values in the Eastern Corn Belt are decreasing modestly.

Barry Ward with Ohio State University tells Brownfield their recent survey of cropland values estimates the cost of average production land to decline about five percent to $7,300 with two main drivers supporting the market.  “We haven’t seen strong increases in interest rates which has, I think, really allowed the land markets to continue to find strength, net worths are still reasonably good.”

He says land price swings in the Eastern Corn Belt are typically slower compared to parts of the Western Corn Belt like Iowa or Illinois.  “They saw much higher increases during those good years, the Eastern Corn Belt was a little slow to react to that which is fairly normal. It’s driven a lot by, often times, the quality of land and competition.”

Ward says cash rental rates are forecast down three percent to $192 per acre.  “There’s still enough producers that are in competition in a given community with enough net worth, enough strength in their equity from those better years, that’s just allowing these rental rates to remain relatively solid.”

He says Agriculture Risk Coverage (ARC) County payments through the Farm Bill have also supported steady cash rental rates.

AUDIO: Interview with Barry Ward

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