Land price growth slows

Farmland prices experienced a leveling off in the first half of 2023 according to Farmers National Company, a real estate and property management firm. 

The first six months of the year saw a slowdown in both sales volume and value growth of farmland nationally. Fewer properties were being offered for sale, and sale prices are increasing at single digit rates compared to double digit rates common in 2021 and 2022.

Eighty percent of purchases are being made by current farm operations.

Rising interest rates are a major factor in the slowing increases, and farm operations that purchased in the last 5 years may now have increased debt service costs. Tightening margins for commodity farmers may also be lowering the appetite and ability to bid up prices. 

High quality agricultural land is still expected to find strong demand on the sales market. 

The average cropland value in the United States has roughly doubled since 2010.

For Market to Market, I’m Peter Tubbs.