Farmland values in the Eastern and Southern Corn Belt remained steady in 2015, according to research conducted by Farm Credit Mid-America. The large ag lender, based in Louisville, Ky., serves Indiana, Ohio, Kentucky and Tennessee. Its team of appraisers researched and analyzed 8,000 land sales in 2015 and compared them to more than 100,000 land sales in the firm's historical database. Based on that study, the value of Indiana farmland declined less than 3% from 2014 to 2015 while values in Ohio, Kentucky and Tennessee saw a slight increase in 2015, according to Dennis Badger, vice president, collateral risk management. "We believe income diversification and less reliance on commodity prices have helped moderate land values in our area," he states.
"Though retail non-ag sales have provided some protection for land values, commodities are still a factor, and land prices could still face pressure in the future due to general economic uncertainty, rising interest rates and other factors. Moreover, a general trend in farmland price declines in the Corn Belt may eventually affect land values here," he says.
Looking ahead for the remainder of 2016, he says, "In our four-state area, we don’t expect a rapid rebound in commodity prices or land values anytime in the next few years, so farm incomes and balance sheets could be pressured. There will likely be fewer land buyers, which means increased marketing time for listed properties with stable-to-declining farmland property values. Land owners who don’t need to sell are likely to hold onto land, resulting in a decreased number of properties on the market," he concludes.