There has been many headlines in the popular press lamenting about falling land prices.
According to Wayne Prewitt, University of Missouri Extension Ag Business Specialist, “most farmers fully understand the effect falling land prices has upon their financial situation.
What they want to know is, will rent values fall as well?” A lot of things have changed over the last decade. The ownership of a lot of farmland has changed from retired farmers to their spouses and their children.
It is important we understand that because much of the farmland is owned by people who no longer have direct ties to the land and often view the land much like an investment.
With the kind of view they often look for a return on the value of the land much like they would with any other investment. Prewitt continued, “when you look at the factors that drive land rent you see a mixed bag. It looks like we have a great crop coming on, even with declining corn prices income should still be good, and let’s face it we are looking at a good bean crop with pretty good prices.”
Every segment in the livestock industry is losing money. According to Prewitt, “that may put some downward pressure on rental rates for pasture and livestock facilities, but right now there seems to be a delay between what happens to land prices and rental rates.”
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Looking at factors that drive land rent
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