Until recently, high commodity prices and low interest rates helped sustain double-digit gains in farmland values, garnering the attention of farmers and investors alike. In fact, investors started paying closer attention to the agricultural asset class in the previous commodity bull market of 2006–2008, first by pouring money into agricultural commodities, then venturing into direct farmland investments.
However, competition from farmers as they earned record profits proved challenging to investors who were outbid by farmers willing to acquire the farm next door at high prices and spread the cost over a relatively low-leveraged enterprise. The bull market for agricultural commodities eventually came to an end with the bumper crop of 2013, but it took well into late 2014 to start translating into declining land values. Farm leverage is set to move higher in 2015, but thanks to ample cash on hand and conservative lending and borrowing practices, it remains low by historical