Finally, farmers have some money in the bank—or in the soil, that is. We’re not talking about the produce they grow. We mean the actual soil—the land. Property values of farmland are soaring. Now some farmers are technically millionaires just because of the land on which they live and work.
In 2021, home prices increased by 15.8%. But farmland increased almost twice as much, especially in Midwest farming states like Iowa. The rising land values are related to higher prices being paid for important crops, such as corn and soybeans, that are grown on the land. But land values also grew due to low interest rates for those purchasing land, plentiful harvest seasons, and optimism that these good things would continue.
The value increase is a mixed blessing. High farmland values are enriching farmers who already own much land. But the same increases make it much harder for small farms or younger farmers starting out to buy property. How do farmers get started in the business today—unless they inherit land to plant on?
For individual farmers, the biggest benefit of rising land values is that it gives them valuable collateral. That allows them to borrow money at better interest rates for annual needs such as seed and fertilizer. They can also secure loans for longer-term investments like tractors and more land. But buying more land to expand can still be a challenge, especially when the price is high.
Holly Rippon-Butler runs a dairy with her parents in upstate New York. She says that buying land now is nearly impossible without an existing source of generational wealth.
Fourth-generation corn and soybean farmer Jeff Frank lives in Iowa. His land has now made him worth millions. He says that even though he’s technically wealthier now, it’s hard to enlarge his holdings as he prepares to pass his livelihood on to the next generation. “I have a son who farms with me, and of course he’d like to expand. But buying farmland right now is a big undertaking,” Frank says. “Even for a small farm, you’re talking about millions of dollars.”
Proverbs 31 tells us that a wise woman “…considers a field and buys it.” Land is important and valuable. God created it for us to use, care for, and provide for others with. But buying land must be done in a wise manner. We should consider the land and the investment with intentionality, as doing so can affect generations.
Why? Farming is a vital part of the world’s commerce, and God’s provision of land to farm is a great blessing. It’s good that farmers are seeing financial benefits for their labor—as long as those benefits don’t derail future farmers from carrying on the task.
