If you suspicion that the new round of farmland values reported by Purdue will trend lower you would be correct. Attendees of the Top Farmer Conference were given preliminary results of the data collected during their annual June survey. Not surprisingly,
Craig Dobbins, Professor of Agricultural Economics at Purdue University reported a drop in values.
“Right now the survey says farmland values are down about 9% from where they were last year. That number may change a bit as we wrap things up, but in order to get that thing to not be negative would be a real surprise, so I think the direction is pretty clear that we’re adjusting to the lower income environment, the lower price environment, the lowered expectations about what prices are going to be in the future. Those sorts of things are really beginning to have an impact now,” he said.
Dobbins told HAT that generally farmland values not only in Indiana but the Midwest as a whole are going down. Values have been declining but now the rate of decline has accelerated. He said data suggests a similar story in cash rents.
“We saw about a ten percent decline in cash rents compared to last year, and again we picked up a much smaller decline in our survey last year. So again the rate of decline is getting larger and as the respondents look forward the consensus seems to be that we’re not done adjusting downward yet, that there’s likely to be more of that over the next few years.”
As Dobbins says, the mood of the market has swung from positive a few years ago to a much more bearish tone today. The new, finalized report will be available in early August from the Purdue Center for Commercial Agriculture.