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Purdue Survey of Indiana Farmland Prices

Indiana’s farmland prices grew at a record pace between June 2021 and June 2022. The Purdue University Farmland Value and Cash Rents Survey shows top-quality farmland in the state averaged just over $12,800 per acre, a 31 percent jump from the previous year. The author of the survey – Todd Keethee – is an associate professor at Purdue… he says the increase between 20-21 and 20-22 set a new record…and talked about some of the key drivers for Indiana farmland prices…

“Things like income, farmer liquidity, the return to other investments, or anything that’ll drive the price of land values, and we ask them to rate is this a positive force, up to a plus five, or a negative force, to minus five. So, these are the averages for the last three years, and you can see a 2021, everything that could put pressure on farmland was a positive pressure. Everything said was giving signs that prices should go up, as all this stuff is positive. Fast forward to this summer 2022. Again, almost everything is positive except for the interest rates, so we’re in a rising interest rate environment that puts downward pressure on land values because we’re having to pay more in mortgage expenses or the cost of funds, which will push down the amount we’re willing to bid into the land value, so that’s the only thing pushing downward pressure this summer.”

Respondents expect the growth in cash rents to begin slowing over the next six to 12 months…The average price per acre for average quality farmland was $10,598, a 31 percent increase from the prior year, while poor quality farmland had the largest rise at 34 percent to $8,631. 

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