While there’s no end in sight to strong farmland prices and rental rates, farmers don’t seem to be overextending, said an Ohio State University Extension agricultural economist.
“Prices are sky high everywhere and continue to increase,” said Barry Ward, OSU Extension’s leader for production business management.
Factors pushing land and rental rates are likely to continue. Increasing commodity prices, profitability of row crops, strong international demand and low interest rates all are part of the equation.
Ward sees farmers purchasing land with plenty of equity and therefore doesn’t anticipate cash flow will be hurt if land values start to fall in the future.
“Farmers are buying land for the same reason as investors: good crop profitability and low interest rates,” he said. “They also want to be able to control the land for production purposes and provide for the next generation. If values drop 10 or 20%, they will still have the land to use as a business asset.”… Continue readingRead More »