Are Agricultural Professionals’ Farmland Value and Crop Price Forecasts Consistent?
Wendong Zhang, Wei Zhang, Chad E. Hart
February 2018 [18-WP 578]
Zhang, W., W. Zhang, and C.E. Hart. 2018. "Are Agricultural Professionals’ Farmland Value and Crop Price Forecasts Consistent?" Working paper 18-WP 578. Center for Agricultural and Rural Development, Iowa State University.
Using agricultural professionals’ forecasts of future farmland values and corn and soybean cash prices for their service area, we analyze whether their land and corresponding crop price expectations are consistent. We find that changes in expected land prices over time are positively correlated with expected crop price changes, suggesting these two forecasts are somewhat consistent. More importantly, we find that the linkage between these two forecasts is significantly stronger in the medium- and long-term as opposed to the short-term, as well as a substantially stronger correlation for districts that have heavier reliance on crop production as a net farm income source.