The demand for farmland has firmed, following a short period of uncertainty this summer due to the drought. That’s according to the farmland-price index monitored by Creighton University economist Dr. Ernie Goss who publishes the index as part of the Rural Mainstreet Index.
In his latest report, Goss said the October reading of the farmland-price index climbed to 71.7, its highest level since March of this year from September’s 61.6. This is the 33rd consecutive month that the farmland-price index has risen above growth neutral. “Except for a brief period this summer, farmland prices have expanded at a pace that, in my judgment, depends too heavily on high agriculture commodity prices and record low interest rates. The farm-equipment-sales index expanded to 60.5, its highest level since May of this year, and was up dramatically from September’s growth neutral 50.0,” said Goss.
The Rural Mainstreet Index (RMI), which ranges between 0 and 100 with 50.0 representing growth neutral, rose to a solid 56.6 from September’s weak 48.3. It was the first time since June that the index rose above growth neutral. “Our survey indicates that the negative impacts of the drought are being more than offset by the positives of very strong incomes from high agriculture and energy prices,” says Goss.
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