Where are farmland values headed?

Given the headlines from some Twitter columns, papers, radio, local farmers etc... I can only say "It depends." Depends on where interest rates go, China's interest, land location and of course commodity prices. Other f actors contributing to current farmland values include: lack of stable alternative investments, cash on hand, limited amount of land on the market as well as a reduction in the amount of land every year due to urban growth etc. Asset appreciation, diversification to portfolios and yields attract outside capital. Farmland is uncorrelated with paper assets like stocks and bonds, has proven relatively resistant to inflation, and is less sensitive to economic shocks (people continue to eat even during downturns) and to interest-rate hikes. Moreover, in the aftermath of the financial crisis investors are reassured by assets they can touch and sniff. Knowing all this, I can say with a high degree of certainty that this will not be another 80's scenario. In 1985, the US Dept. of Agriculture stated the total farm equity to be $605 billion, this year's estimated total farm equity stands at $2.5 trillion.  Take a look at this graph to give you an idea of where values have been over the years and maybe you can imagine where they will go. Follow me on Twitter, Facebook and Linked In where I post farmland related updates. Here is one commentary on farmland values:  Farmland values expected to take direction from crop margins and interest rates                      

Kristi Jo