Recent farmland price increases have caused many to question whether the current situation will result in a repeat of the 1970s farmland value boom and 1980s bust. The articles in this Choices theme examine the drivers shaping current farmland value trends and the risks to future values.

Robust farm incomes have spurred farmland values to their strongest levels since the 1970s. Despite strong farmer and investor demand, most land owners, especially aging farmers are reluctant to sell farmland. Generally, current land economic fundamentals are strong and highly volatile market conditions will influence farmland values and farm ownership trends.

Pasture land values have increased significantly in the past decade, particularly in the central United States Plains States. Pasture rental rates have increased slightly over this same time period. While agricultural influences remain important in explaining the higher values, recreational uses, hobby farms and conversion for urban and residential uses are increasingly important pasture land price determinants.

The economic value of farmland is driven by expectations of future earnings and opportunity costs associated with investment. Current farmland values suggest that investors have expectations for continued high future farmland income and low opportunity costs.

Could today�s surging farmland values and rising farm real estate debt lead to another debt crisis? This paper explores the role of debt in farmland markets. While a debt crisis is unlikely, today�s changing farm real estate debt landscape presents a set of unique challenges for agricultural lenders and producers.

Farmland price increases since 2006 lead to questions about whether price declines like those in the 1980s could occur again. Conditions similar to the 1980s do not appear to currently exist; however, commodity price declines and interest rate increases could lead to lower farmland prices.

Over the past decade, residential markets and home prices have influenced farmland value trends. This paper explores the role of residential housing markets in agricultural real estate markets and how the potential for residential development shapes farmland values. How farmland values vary geographically and in proximity to urban centers are also examined.