1/ "Debt Financing and Timing Farmland Purchases," by Gary Schnitkey. bit.ly/3ECjsvr
Both cash rents and farmland prices rose in 2021.
Both cash rents and farmland prices rose in 2021.
2/ Figure 2 shows current returns to farmland from 1970 to 2021.
A close relationship between current returns and Treasury rates is expected. bit.ly/3ECjsvr
A close relationship between current returns and Treasury rates is expected. bit.ly/3ECjsvr
3/ Land prices increased in most years from 2006 to 2014, resulting in large capital gains in those years.
Land prices were stable and declined from 2014 to 2020, leading to low and negative capital gains. bit.ly/3ECjsvr
Land prices were stable and declined from 2014 to 2020, leading to low and negative capital gains. bit.ly/3ECjsvr
5/ Farmland returns have averaged around 10%.
Even given this 10% average return, financing farmland is difficult because capital gains make up a large portion of total return.
There is little reason to expect this situation to change in the future.
Even given this 10% average return, financing farmland is difficult because capital gains make up a large portion of total return.
There is little reason to expect this situation to change in the future.
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