One of the biggest questions farmers are asking is what their land rent rates will be next year. With higher land values, farmers are expecting rent to be the next big input cost increase in an uncertain time. As farmers are working to lock in other inputs such as fertilizers and seeds for 2023, they really need to know how many acres they will be farming before they can start.
Farm Credit Services recently finished a 12-month regional land value survey in Iowa, Nebraska, South Dakota, and Wyoming. Tim Koch is Executive VP of Business Development for FCS. He says Iowa showed the largest gains.
Koch says demand is being driven by producer profitability. Some farmers can offer a higher rent payment to secure more land.
However, where it is flat and dry, such as in Western Nebraska and Eastern Wyoming, optimism is a bit more constrained.
Iowa is not the only state to see these large increases. Wyoming has seen an almost 23% increase in pasture acres in the past six months.
High land values are great if you have land to rent or sell. The flip side is that there are many small to medium-sized farmers that cannot afford to pay what the big boys do, and they could see a decrease in available acres. That is going to hurt their bottom line.