Land prices surged after Russia invaded the Ukraine, yet despite other rising costs such as fertiliser and fuel, Farmers National Company forecasts land prices in the United States will be steady for the next six months.
“Prices for good quality cropland are up 20 percent in some areas since the first of the year. Recent Farmers National Company auction sales demonstrate the strength in the land market so far in 2022.
“Good land that was selling for around $16,000 US last fall sold for $19,000 to $21,500 per acre at company auctions in March.
"This increase in prices is on top of a 15 to 30 percent jump in value across most Grain Belt states in 2021,” said Randy Dickhut, senior vice president for Farmers National Company.
Growing world demand for grains and meats along with uncertain weather conditions brought good commodity price strength in the New Year, which generated a positive view for net farm income in 2022 and the next several years.
The Russian invasion of Ukraine thrust food and ag into the spotlight, which in turn added to the world’s need for good cropland.
Uncertainties grew from disruptions in input supply chains and the world food and grain trade.
With a return to a normal supply of cropland for sale, farmers who are looking forward to several years of higher grain prices have continued to aggressively bid for the land that did come up for sale during the past few months.
Individual investors also stepped into the market as they looked at farmland as a safe, long-term inflation hedging investment.
This combined heightened demand propelled land prices higher in 2022.