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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


Cortney Cowley

Senior Economist

Cortney Cowley is a senior economist in the Regional Affairs Department of the Federal Reserve Bank of Kansas City. Her current research focuses on agricultural finance, commodit…