Farmland values are on the rise, which means Hoosier property owners are benefiting.
But the market doesnt mean farmers pockets are automatically getting fat.
Purdue University researchers say only about half of the growers own the ground they harvest. This is at a time when the average per-acre value has increased from $2,693 to $7,553 over the past decade.
Such topics will be discussed during the annual Indiana Farm Bureau convention set for Friday and Saturday at Grand Wayne Center in downtown Fort Wayne. About 1,200 members of the group are expected to participate in breakout sessions and presentations.
Farm Bureau President Don Villwock said farmland values are sure to generate discussion.
Increased demand for corn because of the ethanol industry is a main reason for farmland values exploding. Other factors are low interest rates and the demand for corn in China.
It will be a major hallway topic at the convention, said Villwock, who oversees an organization of 75,000 members.
Navigating the Future is the events theme. The conventions keynote address will be delivered at noon Saturday by author and former Navy Cmdr. Mike Abrashoff. He will draw comparisons to Indianas agriculture business and his experiences as a member of the armed forces.
Its Your Ship will highlight Abrashoffs time on the USS Benfold, a low-performing vessel in the Pacific fleet and how he turned things around.
Schrader Real Estate & Auction Co. Inc. of Columbia City said it is faring well thanks to strong farmland prices.
President R.D. Schrader late last month said his company sold six southwest Wisconsin farms – totaling 1,182 acres – at prices as high as $9,252 an acre. The Wisconsin farms, which also included wooded recreational land, sold for more than $6.5 million, with both farmers and investors contending for the land.
There is a lot of competition in the marketplace right now, Schrader said. I wouldnt say, though, that investors are the main buyers because there are a lot of farmers buying from farmers.
Thats if they can afford it.
Craig Dobbins, professor of agriculture economics at Purdue University, said while the owners of farmland certainly stand to profit from the sellers market, small operations with little capital will have a harder time – no surprise there, right?
No different than buying a house, Dobbins said. Farmland prices have more than doubled over the last 10 years and that is significant. There are a lot of nonfarmers benefiting from this run-up in value.
But prices are stabilizing.
I dont see this continuing in 2014, Dobbins said. There will be an increase in farmland values, but it will be much more modest than what weve seen.
Schrader said no one has a crystal ball.
In a market like this one, theres a strong temptation to try to prognosticate, he said in a statement. All we can ever really know is what were actually seeing in the marketplace. We all know that annual gains of 20 or 25 percent cant be sustained forever. But what prices will do in the future is something only the marketplace can tell us.
The public is invited to attend sessions during the Farm Bureau convention at no charge. Luncheons, however, arent open to the public.
For more information, go to www.infarmbureau.org/convention.