While the farm economy has been challenged, one factor that has remain stable has been the price of farmland. Stu Ellis explores that issue in our report from the farm.
President Doug Hensley of the real estate division of Hertz Farm Management says the stability of land values has been helped by the balance sheets for many Cornbelt farm operations….
We have retraced with the drop in farm income. You know farm income is down half of what it was in 2013. We have retraced land values anywhere from 15 to 25%. It depends on who you’re talking to and where you are at exactly. But farmland values have not retraced largely because sales volume has been down. And whenever a good farm does come on the market there are multiple local operations that are financially capable of pursuing that, and if you look at, I know we are standing in Bloomington Illinois, but some data has come out that talks about the entire state of Iowa. 82% of every acre of Iowa farmland is owned debt-free. And when you have that much equity sloshing around the market, the weakness whenever a good farm comes up just doesn’t exist like people would expect it to. I think if we had good data in Illinois, it would be a very similar situation where there is a tremendous amount of equity in the countryside.
And Hensley says lenders have not forced farmland sales as they did in the 1980’s. that’s our repot from the farm. I’m Stu Ellis with WCIA3 your local news leader.