Farmland prices skyrocket despite drought

CLINTON, Ind. (WTHI) - Agriculture experts said people are buying more farmland and the value of Indiana land is going up.

Farmland has nearly doubled in price in the last 10 years.

Ed Shew, a farmer in Clinton, Indiana, said for most farmers, it's enticing to accept high-dollar prices offered from developers for their land, especially after a hard drought.

But he believes farmers recognize the value of their property.

“I think most farmers understand the value of keeping that land in production. That is our livelihood. Without the ground, we can’t produce crop,” said Shew.    

Low interest rates and limited supply are driving up prices for Indiana farmland.

Corn prices are up $7 from $4 last year, and soy beans are up $15 from $10.

Demand from exports and the record-breaking drought has driven up the commodity cost, increasing demand for more land.

Last year, farmland went for $4,000 an acre and now it’s almost $6,000.   

Farmland is a buyer's market right now for future developments.

“I don’t think you see farmers looking to sell their ground just because it’s high-priced. Most of us--I firmly believe--understand that any time we sell ground out of production, we’re losing the amount of acreage to produce the food that we need,” said Shew.    

Agricultural commercial lender Troy Hendricks said there are more buyers than sellers this year, because farmland is a stable investment.

Most farmers don’t want to sell to developers.

“We’re not making any more of that ground. Development is, as the economy swings back, more development will eat up more of that ground,” said Hendricks.    

Shewm said that makes farmland owners remember how valuable their land is.

“We don’t make new ground. When you cover it with concrete and asphalt and buildings, it’s gone. It will not return to production,” said Shew.