Farmland values fluctuate in countySeptember 18, 2019
By ALLEN LAMAN
Survey data released last month by Purdue University’s department of agricultural economics shows that various farmland values are down across the state of Indiana — including in Dubois County.
According to a press release, Craig Dobbins, professor of agricultural economics and the survey’s author, said both farmland values and cash rents are down throughout the state. The decline indicates changes are still occurring because of the tight margins in crop production, the release reads.
“It’s the same story we’ve been hearing for the last couple of years: Current returns are not sufficient to support the current level of farmland values and cash rents,” Dobbins said. “We’re still seeing tight margins, low crop prices and continued fallout from a trade war with China. The future just isn’t looking too bright right now.”
Numbers curated by Ken Eck of Dubois County’s Purdue Extension show that average sale prices for Dubois County and Southwest Indiana experienced a decline of 8%, to $8,167 per acre for top quality farm land. That same area did, however, see increases of 8.8% — up to $6,617 an acre — for the cost of average farmland and 9.3% — up to $4,408 an acre — for poor quality farmland.
Eck explained that the land prices are tied back to the sale prices of corn, soybeans and wheat. A bad harvest complicated by a wet spring could spell more trouble into the future, and as those prices change, it’s important for farmers to have the most up-to-date information.
“Because if you’re not getting anything for your corn or soybeans or wheat, then you can’t really afford to pay for land, or pay high prices for land,” Eck said. “And some people will choose to either get out of farming, or maybe lose some land that maybe isn’t what they really wanted to have to begin with.”
Cash rents also experienced a decline across the state this year. In 2018, the statewide average increased for all land classes. However, the 2019 survey reported a decline across all land qualities.
Dubois County and Southwest Indiana averaged cash rent declines of 11.4% for top quality farmland, 7.7% for average quality farmland, and 6.3% for poor quality farmland.
For land prices to shoot back up, Eck explained a good crop at a good price is necessary. He said that farmers are currently in a stressful position and have been for several years. Markets are down, and international competitors in Argentina and Brazil can undercut the cost to produce grain shipped to China.
“It’s a very stressful time for a lot of the farmers in our county and across the United States,” he said.
He later added: “As far as long-term health of a lot of our local farms, a lot of the bankers I’ve spoken to, and some of the ag economists we have on campus, and just farmers themselves are saying that this is a very stressful time for farms. And a lot of smaller farms are very challenged to make up the difference between maybe what they would prefer to be making or make ends meet.”
Eck said that among the documents that the local extension office gives out, the yearly farmland values sheet is probably the one thing we have the most calls about.
“Farmers just want to know what the correct prices are,” he said. “Either if they’re renting grounds, so they don’t have to pay more than they should be paying, or if they’re the owners of the grounds, they know what a fair price is.”
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