March 28, 2022
Prices for good cropland in the grain belt
have taken another jump higher during the first quarter of 2022. The most
recent and dramatic factor supporting ag land prices is of course the
devastating Russian invasion of Ukraine which has shaken markets for ag
commodities, fertilizer, and oil to mention just a few. The
ensuing uncertainty in the world's food and ag supply drove commodity prices
higher and increased the demand for farmland helping to move land prices
upward.
There were also underlying factors in play
that were already strengthening land prices in the new year. Two months ago, we
examined the factors that influenced land prices during 2019-2021 provided by
Purdue University. Many of the factors are as strong or stronger at the start
of 2022.
Growing world demand for grains and meats;
along with uncertain weather forecasts, brought good commodity price strength
in the new year. This generated a positive view for net farm income in 2022 and
the next several years despite the higher input costs. Inflation concerns came
into the market more strongly for some land buyers as they were wanting a safe
inflation hedging investment.
Prices for good cropland moved higher at the
start of 2022 with the firming of multiple influencing factors coupled with strong
demand from farmer and investor buyers and a normal supply of farmland for
sale. The Russian invasion of Ukraine thrust food and agriculture into the
spotlight which has added to the world's need for good cropland elsewhere. The
result of all these factors has been another jump in United States cropland
prices during the first quarter of 2022.

Randy
Dickhut
Senior Vice President - Real Estate Operations
Register online to receive email updates.