Land values would decline by an additional 1% by November 2021, according to a survey conducted annually for Iowa State's Soil Management and Land Valuation Conference.
“Respondents cited lower interest rates, good crop yields, and strong demand amid tight land supply as main factors driving up land values,” said economist Wendong Zhang of Iowa State University. “Some of our other recent research supports the role of lowered interest rates in land values.”
Cropland values have been relatively stable since 2014, fluctuating slightly from an annual nationwide average of $4,030 an acre to $4,100 an acre, say USDA data. During that same period, net farm income dropped by 50% with the collapse of the commodity boom and then began a slow recovery in 2017. Farm income is a gauge of wealth and includes the value of grain held in storage. Surveys that focus on individual states or farming regions say land values softened in recent years and declined slowly.
The USDA’s annual Land Values report is based on a survey of farm operators. The 2020 report is scheduled for August 6.
Read the June 23 Successful Farming story., "Farmland Values Constrained by Falling Income, Pandemic."
In a June 26 World-Grain.com story, "Global ag trade feels COVID-19 impact."
The composition of those products China buys may look different than in the past, said Wendong Zhang, assistant professor and extension economist at Iowa State University, during a separate farmdoc webinar. “China has the potential and capacity to increase ag exports from the US despite delays due to the coronavirus,” Zhang said. “We may not see a repeat of what we have been seeing in terms of the composition of what we’re selling to China. This will also be a more balanced portfolio when we are looking at US agriculture trade.”