The 2020 Purdue Farmland Value and Cash Rents Survey suggests that farmland prices across Indiana improved since the June 2019 survey; however, many of those gains occurred between June and December 2019. Since then farmland prices have declined modestly.
The strongest year-to-year statewide increase was for poor quality land, which was up 6.3%. Top-quality land was up 4.5%, and average-quality land was up 3.2%. Between June and December 2019, top-, average-, and poor-quality farmland values increased by 5.5%, 5.0% and 8.7%, respectively; yet, between December 2019 and June 2020, top-, average-, and poor-quality farmland values posted modest declines of 1%, 1.7%, and 2.2%.
Todd H. Kuethe, Purdue associate professor and the Schrader Endowed Chair in Farmland Economics, who authored the survey, said that many of the survey’s respondents emphasized the uncertainty related to the current COVID-19 pandemic.
“Given the disruptions across the food value chain and deep economic uncertainty, it is difficult to posit what the next year has in store for Indiana farmland market,” he said. “The COVID-19 pandemic is a global phenomenon that will likely continue to disrupt trade patterns and income flows around the world. Everyone is hoping for a quick economic recovery, but the degree to which COVID-19 will impact land values is yet to be seen.”
Statewide cash rental rates also increased across all land quality classes in 2020. The largest increase was in low-quality land, which increased by 5.4%, average-quality increased 4.8%, and top-quality land increased 4%.
For a more in-depth analysis of the survey, the Purdue Center for Commercial Agriculture will host a free webinar from 3:30-4:30 p.m. EDT on Aug. 7. The public is invited to join Purdue agricultural economists Kuethe, James Mintert and Michael Langemeier as they breakdown the Purdue Farmland Values Survey and USDA Land Values report, discuss marketing strategies for 2020 corn and soybean crops, and make projections for 2021 corn and soybean returns.
The Purdue Farmland Value and Cash Rent Survey is conducted each June by Purdue’s Department of Agricultural Economics and published in the Purdue Agricultural Economics Report. The survey is produced through the cooperation of numerous professionals knowledgeable about Indiana’s farmland market. These professionals provided an estimate of the market value for bare-poor-, average-, and top-quality farmland from December 2019 through June 2020, and a forecast value for December 2020.