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July 29, 2021

Leveraging Land Equity

Learn how to make your land work for you.

The stability of U.S. farmland in the face of the economic calamity in 2020 has made it an even more attractive investment to hedge risk than in decades past. Tenant farmers are reliant on affordable cash rents to make a living and lack the safety cushion needed for when the market shifts. When you own the land you operate, you have a stronger financial footing and more opportunity to increase revenue streams that reap the long-term benefits of enhancing your land, its soil, and the quality of the food grown from it.

Successful rural land ownership requires two things: an understanding of the potential value of the property and the initial capital to invest in its worth.

U.S. Cropland Valuation: Understanding the Worth of Your Land

Rural landowners know all too well that the value of U.S. farmland is not the same across the country. There are several interconnected factors that influence cropland valuation and future profitability.

Based on historical trends, we know that if the correlation is high, cropland values will increase as cash rents increase and interest rates remain low. On the contrary, cropland values will decrease if interest rates increase and cash rents do not.

Therefore, if interest rates remain low into 2022 as currently expected, prices on quality cropland are expected to increase by as much as 10 percent by the end of 2022 in select regions.

Regional Factors Impacting U.S. Croplands

U.S. regions like the Midwest, Southern Plains, and Delta—where key commodities like corn, soybeans, wheat, and cotton are prominent—are currently showing the highest potential return rates due to a strong commodity market. Each region has specific strengths and challenges landowners must consider to mitigate risk and optimize the productivity of the land.

Interested in learning more about the current value of cropland and the 2022 outlook for each of the six major U.S. regions? Download AgAmerica’s 2021 U.S. Cropland Investment Report to explore statistical insights on cropland value trends, rates of return, capitalized value, and more, from Chief Economist Dr. John Penson.

We Know Agriculture and We Know Land

Successful rural land ownership requires an understanding of your unique property and the ability to continuously adapt in an ever-changing world. The focus of traditional institutions is often fragmented, falling short of supplying the flexible type of financing operators and landowners need. Working with a private alternative land lender like AgAmerica gives farmers, ranchers, and rural landowners additional support and guidance to cultivate the success of their operation over the long term.

Our straightforward, collateral-focused approach to lending allows us to leverage the strengths of your business and the equity in your land to create a loan package perfectly customized to your unique needs. Across the nation, landowners are tapping into the value of their land and using AgAmerica’s flexible land loan programs for:

Contact us today to learn what it’s like to work with a lender dedicated to a thriving future for rural America and the infinite resources it holds within its land.

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