WEST LAFAYETTE, Ind. – The Purdue Farmland Value and Cash Rents Survey suggests Indiana farmland costs grew at a file tempo between June 2021 and June 2022, exceeding earlier highs set in 2021. Statewide, top-quality farmland averaged $12,808 per acre, up 30.9% from the identical time final yr. The common per acre worth of average-quality farmland equally elevated by 30.1% to $10,598. Poor high quality farmland costs exhibited the most important enhance of 34.0% to $8,631.
“Multiple components are influencing the rise in farmland costs, together with optimistic web farm incomes, comparatively robust commodity costs, inflation, and excessive farmer liquidity,” mentioned Todd H. Kuethe, Purdue affiliate professor and the Schrader Endowed Chair in Farmland Economics and survey writer. “However, rising rates of interest are related to elevated prices of borrowing, which put downward strain on purchases financed by means of mortgages.”
Statewide money rental charges additionally elevated throughout all land high quality courses in 2022. Average money rents elevated by 11.5% for top-quality land, 10.8% for average-quality land, and 13.2% for poor-quality land. The will increase in money rents had been the best noticed for the reason that 2011–2012 interval. Across the three high quality grades, money rents additionally reached a file excessive in 2022 at $300 per acre for high-quality farmland, $252 for average-quality, and $207 for poor-quality land. At the regional degree, the most important money rental fee will increase for top- and average-quality land had been within the Northeast (21.3% and 13.2%, respectively), and the most important enhance for poor-quality land was within the Southwest area (18.6%). Across all three high quality grades, the best per acre common money hire was noticed within the West Central area.
While rental charges throughout all three high quality grades elevated in virtually all areas, the money rental charges grew at a slower fee than market costs. As a end result, hire as a share of land worth declined relative to 2021.
The worth appreciation charges for farmland transitioning out of agricultural manufacturing or bought for leisure functions surpassed the earlier file progress charges noticed in 2011. Statewide, the typical worth of transitional land was up 36.5% from June 2021, with a mean worth per acre of $24,240. Recreational land costs grew by 21.8% to a mean per acre worth of $9,121. For the rest of 2022, respondents count on transitional land to extend modestly by 2.3%, whereas the worth of leisure land is predicted to carry comparatively secure.
For extra in-depth evaluation on the survey, the Purdue Center for Commercial Agriculture will host a free webinar 1-2 p.m. ET Aug. 24. Join Purdue agricultural economists Todd Kuethe, James Mintert and Michael Langemeier as they break down the Purdue Farmland Values Survey and USDA Land Values report, talk about advertising and marketing methods for 2022 corn and soybean crops, and make projections for 2023 corn and soybean returns. Register for the free webinar at https://purdue.ag/landvalues2022.
Purdue’s Department of Agricultural Economics conducts the Purdue Farmland Value and Cash Rent Survey every June and publishes it within the Purdue Agricultural Economics Report. The survey is produced by means of the cooperation of quite a few professionals educated of Indiana’s farmland market. These professionals offered an estimate of the market worth for naked poor, common, and top-quality farmland in December 2021, June 2022, and a forecast worth for December 2022.
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