Despite the pandemic, farmland values soared to record highs in Indiana, up by as much as 14 percent this year, according to agricultural professionals surveyed by Purdue University. "Surprisingly, many of the current economic forces put upward pressure on farmland prices," said Purdue on Tuesday.
Thirteen House Democrats representing farm districts asked party leaders on Thursday to exempt farmers from President Biden's proposal to apply the capital gains tax more stringently. Iowa Rep. Cindy Axne, one of the organizers of the letter, said "a significant number of Democrats" support the farmer exemption.
President Biden proposed stricter application of capital gains taxes, potentially generating billions of dollars in federal revenue, on Wednesday by restricting use of the decades-old "stepped-up basis" that reduces liability on inherited property. Although the White House said it would not increase taxes on heirs who want to keep the family farm running, the largest U.S. farm group was skeptical that the protection could be fashioned into law.
Despite its fearsome reputation, only a comparative handful of farm households are obliged to file a federal estate-tax return and most of them will not pay the government any money, said USDA economists. Large tax exemptions — $11.58 million per person in 2020 — shield most estates from tax liability.
Higher commodity prices are putting cash in farmers' pockets and as a result, farmland values are headed upward this year, said economist Brent Gloy. "The question most are considering is, 'How high will farmland values adjust?'" asked Gloy in a blog.
Farm income and land values surged in the closing months of 2020, lifted by higher commodity prices and large federal payments, according to farm lenders across the Midwest and Plains. With the commodity rally expected to persist, the farm economy was in its best shape in years, said the …
Ag bankers in the Midwest reported the largest year-over-year increase in agricultural land values, 2 percent, since 2014, said the Chicago Federal Reserve on Thursday. The Kansas City Federal Reserve said land values rose by 1 to 3 percent in the Plains, with the value of ranchland and non-irrigated cropland rising the most.
Farmland prices are holding steady and agricultural banks are financially strong — potentially two key sources of support for the farm sector during the disruptions of the coronavirus pandemic — said the Federal Reserve in a report on Thursday. (No paywall)
The USDA will pay an annual rent of $55 an acre on land entering the Conservation Reserve through the recently completed signup, a drop of $8 an acre from the last time landowners idled large tracts of land in the reserve, said a USDA spokeswoman on Wednesday.