The story so far: the Federal Reserve in Kansas City mid-2013 published that irrigated cropland in its district rose 30% in 2012, while the Chicago Fed reported a 16% increase. Last year’s drought in Iowa last year notwithstanding, farmland prices have nearly doubled since 2009 to an average of $8,296 an acre. Prices in Nebraska, says the Fed, have also doubled during the same period.
The USDA’s semi-annual survey on the state of farm finances, called the Agricultural Resource and Management Survey (ARMS) is “the only national survey that annually produces observations on field-level farm practices, the economics of the farm operating the field, and the characteristics of farm operators and their households”. This year’s ARMS look at the economics of farm operations is showing a race between rented and purchased land prices, both rising, but one lagging the other significantly.
I‘ve not spent much time on a farm — I’m more the research library type. So when I saw the title of the NAR REALTORS® Conference & Expo “Farmland: The Hottest Commodity In The World”, I expected and got a new experience: a detailed tour of the economic and social contours of the business of farmland.
Our session’s guide for this market rundown was Randall Hertz of Hertz Farm Management, Inc., an Iowa firm dedicated to managing farmland in the US and Brazil. They have over 2,200 farms under management totaling over half a million acres.