The
worst drought in nearly a quarter century didn't stop Indiana farmland values
from continuing to grow in 2012, a Purdue University study released Tuesday
shows.
High
net farm income, low interest rates and high farmland demand with supply
combined to increase land values upward by 14.7 percent to 19.1 percent,
depending on productivity, according to the study. Farmland rental rates rose
by about 10 percent.
"While
the 2012 Indiana crop suffered from the worst drought since 1988, the increase
in farmland values did not bother to slow down," Craig Dobbins, a Purdue
Extension agricultural economist, said in a news release.
The
drought sent corn and soybean prices soaring to all-time highs, the study said.
Combined with crop insurance indemnities, that meant better-than-expected farm
incomes.
High-productivity
land values jumped by 19.1 percent, to $9,177 per acre, the study said.
Average-productivity land increased 17.1 percent, to $7,446 per acre, and
poor-productivity land was up by 14.7 percent, to $5,750 per acre.
Cash
rents for high-productivity land increased by 10.9 percent or $29 per acre.
Rent for average-quality land was up by 10.1 percent, or $21 per acre, and rent
for poor-quality land was up 9.4 percent, or $15 per acre.
Land
values, cash rents and farmland productivity were estimated for the study by
surveying Indiana rural appraisers, agricultural loan officers, Farm Service
Agency personnel, farm managers and farmers, Purdue said.
...
In contrast, the DLGF's certified value of agricultural land for assessment purposes is $1,760 per acre for 2013.
