Examining farmland value data sources for accuracy and reliability
The financial health of U.S. agriculture can often be directly assessed by reviewing the latest farmland value data reports. Whether derived from actual land sale data or compiled survey results, a recent study suggests the accuracy and reliability of farmland value data stays relatively consistent across sources. However, different sources can offer their own distinct benefits and insights.
"A hot button issue in agriculture is whether or not farmland values are sustainable, not to mention if they are forming a price bubble," said Brian Briggeman, director of the Arthur Capper Cooperative Center and associate professor with the Department of Agricultural Economics at Kansas State University. "It's important to know what data sources can offer the most relevant, timely information toward assessing the near-term future of farmland value trends."
Briggeman, along with two Oklahoma State University researchers, studied the reliability and accuracy of three farmland value data sources--the U.S. Department of Agriculture; the Federal Reserve Bank of Kansas City and its Agricultural Credit Survey; and actual land sales. Their results showed that USDA and KC Fed survey-reported land values trended similarly to actual land sale prices over time.
"Given the fact that actual land sale prices are difficult to obtain, it is quite encouraging to see that publicly available survey data of farmland values is reliable and fairly accurate," Briggeman said. "In fact, one can even gain insights into near-term land value trends from the timelier surveys, such as KC Fed's Ag Credit Survey."
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