Farmland values are on the rise in the Midwest. Hinnerk Wolters, a farm real estate broker for Hageman Realty, says a jump in commodity prices is contributing to the rise.
“We’ve seen a pretty significant shift in commodity prices just in the last half year which can be attributed to Chinese demand as well as some crop production struggles throughout the world. Generally, as farmers have more income, they like to reinvest that income into farms.”
Wolters, who also farms himself, adds that low interest rates are also a contributing factor.
“The interest rate environment has stayed low and the Federal Funds Rate has stayed low to keep the economy moving. I think as people have seen that they’re thinking it may be a good time to lock rates in as they may increase going forward. So, it’s made for some good opportunities.”
Wolters says investors right now are seeking a safe investment, and farmland is a safe investment.
“I think the last year going through the COVID pandemic has made people look for, ‘Where can I invest that is safe and stable and long-term?’ I think farmland has ticked that box for a lot of people who are either investors or farmers who just say, ‘Boy, farming has been good to me. Let’s add to that.’”
Hageman Realty serves farmers and investors in Indiana, Illinois, Wisconsin, and Texas. They are the farmland specialists in the Midwest. Learn more about Hageman Realty at hagemanrealty.com.