“I’m definitely surprised by the magnitude,” said Wendong Zhang, an economist at Iowa State University who oversees an annual farmland value survey.
The rising values, especially in the Midwest, are due to high prices being paid for the key commodity crops of corn and soybeans, plentiful harvests in recent years coupled with low interest rates and optimism the good times will continue.
But they're a mixed blessing. They're enriching farmers who already have a lot of land, but making it much harder for small operators or younger farmers starting out to get land unless they happen to inherit it.
Most purchases are by operations that see the value of larger scale, seizing the chance to buy nearby land.
“If you miss this opportunity, you may not get another chance,” Zhang said, describing the current mood.
This story also covered by
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The Times and Democrat, Jan. 30
Owensboro Messenger-Inquirer, Jan. 31
Zhang was interviewed for a Jan. 18 AgUpdate.com story, "Land investment relates to farm income, recreation."
The reasons investors look at farmland also vary, according to Wendong Zhang, a professor of economics at Iowa State University who runs Iowa State’s annual farmland value survey. One is for recreational purposes. That has always been a factor more for low-quality farmland and timber or for land near metropolitan areas — often been connected to hunting access. It may have become a bigger factor in the last two years because some urban residents may have been looking for an outdoor escape from the pandemic.
“People appreciated open spaces more,” Zhang explains.
But Zhang says another factor may be coming into play.
Farmers have been the recipients of large government payments in recent years, first through the market facilitation payments aimed at offsetting trade losses and then through COVID aid payments. Some investors may be looking to capture some of that money.
This story also covered by:
The Pantagraph, Jan. 23