WEST LAFAYETTE, Ind. – A new survey suggests Indiana farmland prices grew at a record pace between June 2021 and June 2022, exceeding previous highs set in 2021.
According to the Purdue Farmland Value and Cash Rents Survey, top-quality farmland averaged $12,808 per acre, up 30.9% from the same time last year.
The average per acre price of average-quality farmland similarly increased by 30.1% to $10,598, according to a press release from Purdue.
Poor-quality farmland prices exhibited the largest increase of 34.0% to $8,631.
“Multiple factors are influencing the increase in farmland prices, including positive net farm incomes, relatively strong commodity prices, inflation, and high farmer liquidity,” Todd H. Kuethe, Purdue associate professor and survey author, said in a press release. “However, rising interest rates are associated with increased costs of borrowing, which put downward pressure on purchases financed through mortgages.”
Statewide cash rental rates also increased across all land quality classes in 2022.
Average cash rents increased by 11.5% for top-quality land, 10.8% for average-quality land, and 13.2% for poor-quality land. The increases in cash rents were the highest observed since the 2011–2012 period.
Across the three quality grades, cash rents also reached a record high in 2022 at $300 per acre for high-quality farmland, $252 for average-quality, and $207 for poor-quality land.
At the regional level, the largest cash rental rate increases for top- and average-quality land were in the Northeast (21.3% and 13.2%, respectively), and the largest increase for poor-quality land was in the Southwest region (18.6%).
Across all three quality grades, the highest per acre average cash rent was observed in the West Central region.
While rental rates across all three quality grades increased in almost all regions, the cash rental rates grew at a slower rate than market prices. As a result, rent as a share of land value declined relative to 2021.
