The rising price of farmland in Kentucky continues to slow down, according to a study by Farmers National Bank, which has 12 branches in the commonwealth. Paul Schadegg is a senior vice president for Farmers National Bank. He said record prices for agricultural land in 2020 and 2021 began to level off in the last half of last year – a trend that continued the first six months of this year.
“Overall, when we look at that, that graph, it's been a steady increase in value over long periods of time. So for a producer, especially where they typically own land, that's an asset that keeps growing for them.”
Schadegg said the price of agriculture land typically mimics the price of commodities, and over the last five years, many farm operators had extra money to bid for farms. He said while farmers continue to face higher interest rates and higher production costs, 70 percent of ag land sales are still to operators of other farms.
“When you're bidding for farmland, you may be bidding against an investor and investor has no emotional attachment though. So they'll bid up to a certain level, when it no longer meets their return on investment, they will step away from that market.”
Schadegg said overall, the steady increase in the value of farmland over long periods of time is an asset that keeps growing for farm producers.
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