With cash in their wallets, farmers are joining investors and other bidders to drive up prices for farmland, said the largest U.S. farm management and real estate company on Tuesday. “Farmland sales prices are up by 5 to 15 perent in the past six months with most of the increase coming since the first of the year,” said Randy Dickhut of Farmers National Co., based in Omaha.
Land prices are rising in most parts of the Grain Belt and for most types of farmland. Dickhut said prices for good quality cropland were approaching the levels of 2014, at the end of the last sustained commodity boom. Low interest rates make farmland more affordable, even with a higher purchase price.
Farmers are bidding more aggressively for farmland than during the past six years, when U.S. net farm income, a USDA gauge of farm profitability, was in a rut due to a slump in crop and livestock prices, said Farmers National. Farmers are feeling more financially secure after record-large government payments in 2020 and a recovery of commodity prices last fall, it added.