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Steady Farmland Values Underpin U.S. Farmers’ Borrowing Capacity

USDA estimates the value of farm real estate assets (land and its attachments) will account for 82.7% of total 2019 farm sector assets. This represents farmers’ most significant collateral when seeking loans for their operations and capital expenditures, such as ag equipment. In total, the value of farm real estate assets is currently estimated to be nearly $2.6 trillion. While farmland values have leveled off since 2014 after a long period of appreciation following the farm crisis of the 1980s, many regions continue to experience modest year-over-year increases. Considering ag’s ongoing sluggishness, farm real estate values have more than held their own since the ag downturn starting in 2014. In fact, the Economic Research Service (ERS) of USDA anticipates farm real estate assets will increase 2.1% in 2019 in nominal terms. When adjusted for inflation, the value of farm real estate assets is expected to be relatively unchanged, increasing just 0.2%.

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Mergers & Acquisitions

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Earnings Reports

  • Lindsay Corp. Reports 1Q20 Revenues Down 2%

    Lindsay Corp. today announced results for its first quarter of fiscal 2020, which ended on Nov. 30, 2019. Revenues for the first quarter of fiscal 2020 were $109.4 million, a decrease of $2.6 million, or 2%, compared to revenues of $112.0 million in the prior year first quarter.

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    Buhler Industries, the manufacturer of the Versatile and Farm King line of agriculture equipment, reported its year-end earnings on Dec. 30, 2019. Revenue for the year was $229.1 million, down $58.9 million or 25.7% from sales of $288.0 million in 2018.
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Audio Edition

Audio Newsletter — December 2019

Here is the Audio Edition of Ag Equipment Intelligence’s December 2019 newsletter. This additional new format is another way for Ag Equipment Intelligence VIP members and subscribers to stay up-to-date with the latest news and trends from the worldwide farm equipment industry.

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Featured Video

Dealer Optimism Index Shows Significant Improvement

The latest episode of On the Record is now available! In this week’s episode, we discuss improvements in dealer sentiment at the end of 2019 as well as producers likelihood to purchase farm equipment. From the Precision Farming Dealer Summit in St. Louis this week, Technology Editor Jack Zemlicka reports on how dealers can serve as consultants to their customers, particularly when it comes to technology. Also in this episode: Buhler Industries’ revenues drop 25.7%, the Dallas Fed reports 4Q ag loan demand declines and farmland values are likely to hold steady in 2020.
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Data & Trends

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Ag Economy Barometer

Farmers Remain Confident in Longer Term Farmland Value

Results from the most recent Purdue University/CME Group monthly Ag Economy Barometer study showed farmers surveyed in December were somewhat less optimistic about the future direction of farmland values than indicated on November's survey. The percentage of respondents who expect higher farmland values, both in the upcoming year and the next 5 years, declined in December compared to a month earlier. 

Click here for the full article.

  • Steady Farmland Values Underpin U.S. Farmers’ Borrowing Capacity

    USDA estimates the value of farm real estate assets (land and its attachments) will account for 82.7% of total 2019 farm sector assets. This represents farmers’ most significant collateral when seeking loans for their operations and capital expenditures, such as ag equipment. In total, the value of farm real estate assets is currently estimated to be nearly $2.6 trillion. While farmland values have leveled off since 2014 after a long period of appreciation following the farm crisis of the 1980s, many regions continue to experience modest year-over-year increases. Considering ag’s ongoing sluggishness, farm real estate values have more than held their own since the ag downturn starting in 2014. In fact, the Economic Research Service (ERS) of USDA anticipates farm real estate assets will increase 2.1% in 2019 in nominal terms. When adjusted for inflation, the value of farm real estate assets is expected to be relatively unchanged, increasing just 0.2%.

  • Farmers Remain Confident in Longer Term Farmland Value

    Results from the most recent Purdue University/CME Group monthly Ag Economy Barometer study showed farmers surveyed in December were somewhat less optimistic about the future direction of farmland values than indicated on November's survey.

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