RETURNS, INTEREST-RATES, AND INFLATION - HOW THEY EXPLAIN CHANGES IN FARMLAND VALUES

Weather in the Corn Belt and northern plains and the elimination of tr aditional commodity programs have refocused attention on farmland valu ation. This study uses a statistical formulation of information provid ed by individual regressors to examine the sensitivity of farmland val ues to changes in inflation, returns on agricultural assets, and the c ost of capital. The results indicate that inflation provides the most information on changes in farmland values; however, the regional resul ts indicate that regions that tend to be more sensitive to changes in the return on agricultural assets also rely more heavily on government payments.