Farmland values hit all-time highs this year even as the rate of increase has slowed. Farmers and ranchers have experienced firsthand the ever-increasing value of farmland, and a new analysis lays out those numbers. Danny Munch, an economist with the American Farm Bureau Federation, says prices have hit record highs despite a cooling in the rate of price increases.
Munch says that farmers and ranchers who own land will have stronger balance sheets thanks to rising land values, but this brings new challenges to buying or renting land.
Munch notes that with increasing competition from real estate development and other land development initiatives, there’s a growing likelihood that agricultural land will be converted to other uses in the long run.
Although rising farmland values can provide farmers with financial advantages, such as better access to credit, they can also unintentionally harm the farming community. As Munch mentioned, rising farmland prices can limit new farmers’ access to land, increase costs for renters, and impede farm expansion. It is even more concerning when we consider the competition farmers face for access to land from various developers. Taken together, these factors can force smaller farmers out of business because they cannot compete with these giant corporations.
