From the farm: land values

CENTRAL ILLINOIS (WCIA – How much does good farmland cost these days?

Farmland values ​​are skyrocketing and farmers are the main buyers, said Randy Dickhut, real estate manager for Farmers National.

“Here we are, after the pandemic, with the extra government money that arrived in 2020, better commodity prices, better net farm incomes for a year or two, really propelled land prices,” he said. said Dickhut. “Here’s a little more to sell in the market, but the demand is higher than that, and they’ve really gone up all over the place. “

With these remarks, it looks like farmers buy rather than investors buy.

“Farmers tend to buy most of what is offered for sale. In normal years it will be 60-80%. We think right now it’s probably over 80% that farmers are buying, ”Dickhut said. “The rest are individual investors who might have around 1,031 foreign currencies or who might want to invest in farmland as a hedge against inflation, which also happened after the pandemic, as people look at the value in the long run. term of agricultural land. “

What should be the value right now and yes, the value would someone pay for it?

“Well, it will depend on your investment philosophy, I guess,” replied Dickhut. “For the farmer, when that farm goes up for sale once every three or four generations, and he wants to expand his operating base for the next generation, or invest in the land for his retirement, he’s going to l ‘buy, because the farmer has a better economic situation to buy land than the investor himself, because they get all the income.

“As an investor, you only receive the rental portion of that income each year, so the farmer has a little economic advantage,” Dickhut continued. “In addition, it fits into their operations, spreads their costs and it’s a long-term investment that they know well. And it’s a safe investment because most people turn to it.

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