This paper constructs a version of Campbell and Shiller's dividend-price ratio model in order to study the consistency of farmland price behavior with the implications of a present value formulation that accounts for time-varying discount rates. The model imposes testable restrictions on the joint behavior of rent-price ratios and a linear combination of the ex-post required rate of return and rent growth rates. The restrictions are found to be inconsistent with annual Iowa farmland price and rent movements for the 1926-1986 sample period.