15 questions to ask before purchasing farmland

Source: American Bankers Association

 

Record land values make buying decisions tougher

 

The increase in crop and livestock prices have generated significant profits for many crop farmers, which some are using to buy additional land. Growing demand has driven land values to record highs in many areas. Whether farmers are using cash or borrowing money, buying land should include a well-researched financial plan.

“Farmers should consult their banker throughout the land buying process, to ensure decisions made today best position them to prosper and obtain credit in the future,” said John Blanchfield, senior vice president of agricultural and rural banking at the American Bankers Association (ABA). “When it comes to buying land, you cannot spend too much time researching all of the contingencies.”

Given current market conditions, ABA’s Agricultural and Rural Bankers Committee, made up of leading agricultural bankers in the country, has developed the following recommendations for buying farmland:

No one knows more about financial budgeting and cash flow planning than your banker. ABA recommends making an appointment to talk with your banker about the significance of purchasing land and how it will impact your business.

The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $14 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $185 million in assets. Learn more at aba.com.