WEST LAFAYETTE, Ind. — Indiana farmland values and cash rents are down throughout the state, according to the August 2019 Purdue Land Value Survey, published in the Purdue Agricultural Economics Report by the Department of Agricultural Economics.
Craig Dobbins, professor of agricultural economics at Purdue and author of the survey, said the decline is part of an ongoing adjustment process and due to today’s tight margins in crop production.
Dobbins said Indiana farmland hit peak values in 2014, but began to tumble when the prices of corn, soybeans and other commodities dropped as the supply of grain caught up with demand.
Over the years, he said, farmland values began to fall as the growth rate in corn for ethanol slowed substantially and as demand for soybeans waned when other countries started growing more.
“It’s just part of the process of adjusting to lower commodity prices and the environment,” he said.
Dobbins said he doesn’t see anything on the horizon that will lift corn and soybean prices over the short run.
He said he isn’t really optimistic about the farmland markets going up anytime soon because he believes the farmland market is stable where it is at.
According to the survey, top quality and average quality farmland decreased in value from last year by 5.3% and 0.9%, respectively. Poor quality farmland remained stable with almost no change on a statewide basis.
Cash rents also experienced a decline. In 2018, the statewide average increased for all land qualities.
But this survey reported a decline across all land qualities. Top quality farm land experienced a 4.6% decline in cash rents, followed by a 1.4% and 1.2% decline in average and poor quality farmland, respectively.