Relating to the Iowa and Midwestern farmland market, the theme of 2020 seems to be that of stability... People still favor owning farmland. And in a year like 2020 when stability has been in short supply, Iowa (and Midwestern) farmland has delivered.
The impacts of COVID, the recent monster storm, and other factors will impact our farmland market this fall. But overall, it seems that farmland as an asset class has never reflected stability like it has thus far in 2020. And that stability only seems to add to the collective desire by the market to own more.
For many in the investment world, this year has held more surprises than they would care to experience for the next couple decades! A surprise to some is the fact that farmland, as an asset class, has not really participated in the volatility drama that has played out this year in most other assets.
What should you consider when you look at future generation planning and long-term ownership of your farmland?
Surprising to some, is that the farmland market as reflected by land values, has kept its legs under it through most of the past three to four months. Yes, the number of sales occurring this spring has been down market wide. Periods of great uncertainty will do that to a market. But the fact that sales volume was down has seemed to support the sales that are occurring.
We’ve been fielding inquiries about how all this disruption and societal motion is impacting the various aspects of agriculture. So, let us share some reflections regarding what all of this may mean for landowners in the months – and potentially, years – to come.