High grain prices not only have some farmers eager to get into their fields this spring, but also are driving up the value of farm land.
Higher land prices aren’t a new phenomenon, according to a Purdue University report.
According to the Purdue study, top farm land in northeast Indiana was selling for, on average, $4,772 dollars per acre in June 2009. By June 2010, top farm land was going for $5,153 per acre, an increase of 8 percent. The cost of average farm land rose 7.4 percent during that period, according to Purdue.
Local real estate agents are reporting an increase in value this spring — with availability of good farm land at a premium.
“Prices are pretty solid because of crop prices,” said Steve McKowen, owner/broker at 1st DIBS Auction and Realty in LaGrange.
Larry Smith, an owner/broker at Indiana Real Estate in Auburn, said he listed one farm property for one day before it was purchased.
“It disappears pretty quick,” Smith said. “It’s a very strong market.”
The high commodity prices mean farmers can make more money off their land in a sale, but also by renting it out or farming it themselves.
With most farm land being handed down from family member to family member, there can be times when good farm land is tough to come by.
In LaGrange County, that hasn’t been the case lately.
“There’s probably more (on the market) now than I’ve seen in the last 10 years,” McKowen said.
The market is tighter in DeKalb County, according to Smith.
Prices for land in both areas are up from a year ago.
McKowen estimated farm land prices have increased between 5 and 10 percent in the last year.
Smith said land that was going for between $3,300 to $3,500 per acre a year ago is now going for between $3,500 and $3,800 per acre.
According to McKowen, depending on commodity prices, the farm land market should be strong for the next three to four years.