Land Sales Bulletin’s Post

After a few years of trending up, farmland prices have stabilized across the Upper Midwest. With ongoing negative pressures on profit margins, cash rents are expected to follow suit. How will this impact the outlook on land values for the remainder of 2024? Find out in our latest farmland values appraisal insights report at: https://bit.ly/3LQEnPW

If you own the land, a stall in values might feel better than a drop. But for those considering selling, the Midwest farmland market could be rumbling. The Federal Reserve Bank of Chicago’s latest AgLetter reveals that farmland values in the Seventh Federal Reserve District—covering Illinois, Indiana, Iowa, Michigan, and Wisconsin—paused their upward climb in Q3 2024 after 18 consecutive quarters of growth. 🔹 Key Findings: - District farmland values held steady compared to a year ago but dipped 2% from Q2. - Wisconsin stood out with a 4% year-over-year gain, while Indiana saw the steepest drop (-2%). - Loan repayment rates are down, and renewals/extensions are up, signaling potential financial stress. More details at the link. How are these trends shaping your outlook on Midwest agriculture? Let’s discuss. 👇 https://lnkd.in/g5H38XP5

Lower returns to rented land and higher interest rates began to signal the potential for downward pressure on farmland values in 2023 (see farmdoc daily from August 8, 2023). Those signals continue, with current fundamentals suggesting land value reductions of around 3% in 2025. A 3% decline would be in line with observed adjustments since the 1980s as well as expectations from professional farm managers surveyed in 2024. On the other hand, valid arguments exist for continued strength in farmland values. In particular, strength in the average financial position of grain farms suggests declines in farmland values, if they occur, are not likely to be significant in the short term. https://buff.ly/49lf9Eo

The top 10 states that saw the most significant draw downs in farmland valuation from 1981 to 1987? IA: -60% MN: -54% IN: -47% IL: -47% NE: -45% OH: -40% KS: -39% MS: -38% WI: -30% ND: -28% As long as operators manage their cash flow diligently, they can get through it. This is why watching leverage is vital. Farmers who built a margin of safety during the good times have a path out of tricky situations if they need to borrow against their assets while the chips are down.

Looking for stability AND growth? Midwest farmland might be your answer! 🌾💼 Let’s talk numbers. Over the past few decades, Midwest farmland has quietly been delivering solid returns, rivaling even the S&P 500 in terms of long-term growth. Here’s the comparison: 📈 Midwest Farmland: Average annual appreciation of 6-11% over the last 20 years. Consistent, steady growth with less volatility. 💹 S&P 500: Average annual return of 7-10% over the same period. But with much higher volatility, ups and downs, and market swings. #FarmlandInvestment #SustainableInvesting #WealthBuilding #MidwestFarmland #RealAssets #SP500Comparison

🌡️ Are farmland values cooling down? In 2024, lenders saw a slight increase of 3.8% in farmland values. But moving into 2025, two-thirds of lenders anticipate either no change or a decline in land values. There is optimism in the South and West. Lenders in those areas had a more positive outlook. Access more insights in our 2024 Agricultural Lender Survey Report > https://lnkd.in/eHmq9JtN #AgLending #AgFinance

RaFF just released the Fall 2024 Missouri Farm Income Outlook report, first of many for various states across the Midwest! The report explores farm financial indicators and projections for the Show-Me State. According to the report, Missouri net farm income is projected to decline $3.6 billion in 2024. Although taking another dip from the record-setting farm income level seen in 2022, the 16% decline in 2024 net farm income is still the 4th highest in Missouri's history. Find out more about the impact of farm receipts, production expenses and government payments by reading the full report and dataset. Available at: https://lnkd.in/gy9ATsb2

Assuming a base case scenario that farmland prices will increase in line with inflation, adding tax free yield on top of it apparently makes it look a lot more attractive than highly taxed Bonds and Term Deposits. What do you think? Managing a farmland far away may not be an easy task. There are risks associated with that as well. What if there’s an asset manager who does it for you? Pooled ownership, shared profits and risks. Result - high farmland efficiency, better production yield, more profits. #financialadvice #financialplanning #alternateinvestments #realestate #farmland

Slower Growth in Land Prices Reflects Market Stabilization Land prices have recently shown a decrease in growth, signaling a shift from the rapid increases observed in previous years. Factors such as rising interest rates, increasing farm input & equipment costs, and lower commodity prices are contributing to this moderation. The latest FCC midyear report highlights the market's movement towards price moderation for farmland. It's important to note that land demand varies significantly from one area to another, with premium farmland experiencing high demand. Stay informed about these market trends by checking out the source: https://lnkd.in/gfahK7Ef.

2023 marked a pivotal year, witnessing variable farmland value trends across different regions. Specifically, Western Illinois and the St. Louis area (Regions 3 and 8) saw continued robust value increments, diverging from the trends in the Northeast and Central Illinois (Regions 1 and 6), where values experienced a downturn, a phenomenon not observed in recent years. Furthermore, the frequency of land sales transactions underwent a significant shift. The previous years of 2021 and 2022 were characterized by a rapid pace of auctions and private sales, creating an expectation of a dynamic market environment. However, 2023 introduced a slowdown in transaction velocity, with farmland values largely maintaining or slightly increasing, yet the sheer volume of sales markedly decreased. This recalibration in the Illinois farmland market underscores a period of adjustment and potential strategic realignment for stakeholders, reflecting the inherent complexities and evolving dynamics of agricultural land management and investment. #ProfessionalInsights #AgriculturalEconomics #IllinoisFarmland #MarketTrends #StrategicManagement