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Indiana’s Farmland Values Up Again In 2013
Thursday, August 29, 2013 WEST LAFAYETTE, Ind. — Last year’s drought did little to slow the pace of rising farmland values and cash rents. They are up this year in a big way again, according to a Purdue University study. Drought last year sent corn and soybean prices soaring to all-time highs, which, along with crop insurance indemnities, meant better-than-expected farm incomes. High net farm income, low interest rates and high farmland demand with limited supply combined to push the state’s land values upward by anywhere from 14.7 to 19.1 percent, depending on productivity. Statewide cash rents increased by 9.4 to 10.9 percent. “While the 2012 Indiana crop suffered from the worst drought since 1988, the increase in farmland values did not bother to slow down,” said Craig Dobbins, Purdue Extension agricultural economist. The biggest increases were in high-productivity land, which jumped by 19.1 percent to $9,177 per acre. Average-productivity land increased 17.1 percent to $7,446 per acre, and poor-productivity land was up by 14.7 percent to $5,750 per acre. Land values, cash rents and farmland productivity were estimated for the study by surveying Indiana rural appraisers, agricultural loan officers, Farm Service Agency personnel, farm managers and farmers. The 261 respondents were asked to estimate long-term corn yields for poor, average and top-quality land. The state’s average long-term corn yields for poor, average and top-quality land were 127, 160 and 193 bushels per acre, respectively. Another area that saw growth is the transitional land market, Dobbins said. “The transitional land market — that is, farmland moving out of agriculture — seems to have sprung back to life,” he said. “This is a specialized market, with transitional land value strongly influenced by the planned use and location.” Overall, the survey showed a 24.4 percent increase in average transitional land value, up to $10,581 per acre. However, the estimated values from the 2013 survey varied widely — from $2,500 to $45,000 per acre. The median value was $9,500 per acre — $1,500 per acre more than in 2012. “Because of the wide variation in transitional land values, the median value might give a more meaningful picture than the average,” Dobbins said. Cash rents increased statewide, with the largest jump found in high-productivity land. Top-quality land increased by 10.9 percent or $29 per acre. Rent for average-quality land was up by 10.1 percent, or $21 per acre, and rent for poor-quality land was up 9.4 percent, or $15 per acre. The survey also assessed expectations for where farmland values and cash rents are headed in the future. Dobbins said the consensus is that increases will slow and, in some regions, values might stall or decline slightly. Forty-three percent of the survey participants said they thought farmland values would increase by an average 11.7 percent over the next five years. That means they expect an average annual increase of 2.2 percent. Thirty-five percent of the respondents thought farmland values would decline by an average of 12.3 percent over the next five years — an annual decline of 2.3 percent. The remaining 22 percent expected no change. Continue reading
UK Farmland Prices Soar as Demand and Competition Intensifies
By +Liam Bailey Tuesday 27 August 2013 Intensifying competition in the market to buy up arable land has driven up the price of UK farmland to GPB 7,440 per acre in the first six months of this year. This is three times the average GBP 2,400 paid during the same period in 2004. Big commercial farmers are constantly looking to expand production to take advantage of the long-term trends of rising food prices and economies of scale, according to researchers at the Royal Institution of Chartered Surveyors (RICS), who produced the data. Despite the recent falls in commodity prices food demand is expected to continue rising as populations grow and diets change around the world. On top of that you also have investors’ perception of farmland as a safe-haven investment alongside things like gold. Farmland has outperformed a number of alternative asset classes, which – combined with tax breaks – has enhanced its appeal as an investment, especially given that the latest data shows farmland is now outpacing the growth of gold, as the latter has seen its price weaken recently. “ The growth in farmland prices in recent times has been nothing short of staggering ,” said Sue Steer, spokeswoman for RICS. “In less than 10 years, we’ve seen the cost of an acre of farmland grow to such an extent that investors – not just farmers – are entering the market. “If the relatively tight supply and high demand continues, we could experience the cost per acre going through the GBP 10,000 barrier in the next two to three years.” The most expensive farmland was found in the North West – where supply is tight – at GBP 8,813 an acre, the RICS survey showed, while the cost was lowest in Scotland, at GBP 4,438 an acre. None the less, prices north of the border touched record levels for the Scottish market. Some areas are already past the GBP 10,000 mark, surveyors said. Cheshire-based auctioneers Wright Manley recently sold 13.5 acre block of land near Antrobus near Northwich for well over GBP 12,000 per acre. Speaking of the sale auctioneer Andrew Wallace reported “keen farmer competition for extra land”. In the long-term all signs point to this competition continually intensifying due to the finite supply of arable land versus population growth and consumption trends. There is also the added demand of buying land for renewable energy sources like biofuels. Against this backdrop, food prices will stick above their historical average over the medium term for both crop and livestock products as demand grows and production slows, according to a recent report published by the OECD think tank and the UN’s food agency. Continue reading
Power From Wood, Wood-Derived Fuels Up In June
Taylor Scott International News Taylor Scott International Taylor Scott International, Taylor Scott Continue reading
