Farmland Prices and Capitalization Rates Edge Lower

by Brent Gloy

Numerous farmland surveys (Iowa State, KC Fed, Chicago Fed, Purdue) now seem to be clearly indicating what many had expected for some time, farmland values are heading lower.  This is not surprising given how sharply farm incomes have fallen.  As we pointed out last year, the declines in income have pushed the rate of return to owner operated farmland very low.

Given that both cash rents and farmland values have started to decline, we thought that it would be interesting to examine these values and the current level of farmland capitalization rates on farmland. (more…)