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The value of U.S. farmland has varied widely within and across regions over the last 15 years. Although average farmland values have declined modestly over the past couple of years, farmland values in some areas have fallen sharply, while farmland values in other areas have risen. In recent years, unusually high or low prices at farmland sales have become increasingly likely. Understanding what drives farmland values across regions can provide crucial information about the financial health of farms. Cortney Cowley examines the effects of soil quality, natural amenities, climate, agricultural production, and other location-specific characteristics on farmland values in the Tenth Federal Reserve District. She finds that better soil quality, more precipitation, and larger corn and cattle sales are associated with higher farmland values, while greater distance from urban areas and higher temperatures are associated with lower farmland values.

Publication information: Fourth Quarter 2016, Volume 101, Number 4

Author

Cortney Cowley

Assistant Vice President and Oklahoma City Branch Executive

Cortney Cowley serves as Oklahoma City Branch Executive and Assistant Vice President for the Federal Reserve Bank of Kansas City. Cowley joined the Bank in 2015 as an economist …

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