February 19, 2020

How Do Commodity Prices Affect Farmland Returns?



## Video Transcript

There is another question here about the impact of low commodity prices and does that drive down financial returns and yields?

We touched on that a little bit earlier in the webinar, but as a whole we expect rents to be stable. We don't expect them to be up next year where commodity prices are here and there.

There may be a few places in the US, a few we call really hot markets, like some in Iowa particularly, where rent is already too high and you may see some corrections there.

But as a whole, we expect stability and inversely if commodity prices do improve, we expect rents to improve because we've been flatish for years now in the data.

There's an article on this in our learning center about the 2019 farm outlook which is a little bit dated, but it shows you the correlation between long term land values and commodity prices and rents.


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