Ag producers remain optimistic about farmland values
Farmers remain relatively bullish about farmland values but are a little less optimistic about future increases, according to the latest Ag Economy Barometer.
Purdue University’s Jim Mintert says…“I think producers are probably asking themselves, ‘given the strength that we’ve already observed, how much of an additional rally could we expect.’ I think that probably explains the mild softness in those two farmland value indices.”
The Short-Term Farmland Values Expectation Index fell six points to 142 and the Long-Term Farmland Values Index was down four points to 155. But, Mintert says it’s important to note that both indices remain near their all-time highs.
He tells Brownfield many farmers are expecting farmland cash rental rates to rise.
“Nearly half, 47 percent, of the people in the survey said they expect cash rental rates for corn and soybean land to go up in 2022 versus 2021,” he says.
Among the producers expecting higher rental rates, there has been a shift over the last three months regarding how large of a rental rate increase is likely. Just over 40 percent of corn and soybean growers who expect rates to rise think the increase will range from 5 percent to 10 percent. Thirty-four percent expect a rise of 10 percent or more, compared to 43 percent in May. Twenty-six percent of producers expect an increase of less than 5 percent.
The Purdue University/CME Group Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.
Audio: Jim Mintert