Despite the plunge in grain and soybean prices and forecasts for tightening profit margins well past next year, a large portion of Pro Farmer Members say they will be in the market to buy farmland next year.
Our third annual online survey conducted mid-month found 49% of our Members answering "yes" to the question: Are you in the market to buy farmland within the next year?
That shows the aggressiveness of Members when it comes to expanding their farming operation. This figure is down, but not sharply, from last year’s 55% and is just shy of the 50% mark reported in our 2011 survey. On the flip side, only 6% say they will be in the market to sell farmland next year. That compares to 7.5% last year and 7% in 2011.
As you’d expect, their bullishness about farmland values is tempered compared to a year earlier. About 20% believe land prices will increase next year while nearly 38% believe values will remain unchanged. That compares to 61.5% who thought land values would rise in 2013 with another 30% saying land values would remain unchanged, according to our 2012 survey.
Meanwhile, 31% of Members responding say they think farmland values will decline by less than 10% in 2014, while 11% say they look for land values to decline by 10% or more. That’s a total of 42% of respondents who expect farmland values will decline next year. That compares to only 8.5% who said they expected farmland values to decline in our 2012 survey.
Cash Rent Outlook: Slightly more than half (51.5%) of Members expect cash rents will remain unchanged in 2014. That compares to 24% who told us last year they looked for cash rents to remain unchanged in 2013. The percentage looking for an increase in cash rents is greatly reduced from a year earlier, as you might expect. Less than 2% say they expect cash rents will rise by 15% or more, 5% say they expect rents to increase 10% to 15% and 17% look for cash rents to increase by less than 10%. That’s a total of 24% who expect cash rents will rise.
Last year, slightly more than 73% expected cash rents would rise in 2012. Twelve percent expected an increase of 15% or more, 30% anticipated a rise of 10% to 15% and 31% of respondents looked for an increase of less than 10%. Some 24% said they expected cash rents would remain the same in 2013. Meanwhile, the number saying they expect cash rents will decline rose. Some 19% say they expect cash rents to decline by less than 10%, and 6% say they look for cash rents to decrease by 10% or more. That compares to last year, which found only 2% expected cash rents to decline in 2012 and less than 1% respondents looked for cash rents to decrease by 10% or more.