“The industry has experienced a post-harvest bump in land prices in most grain producing areas. With above average crop yields in most locations, farmer optimism has increased as has the bidding for quality crop land.”
Omaha, Neb. (PRWEB)
January 10, 2018
Data released by land grant universities and industry organizations point out that there has been less farm and ranch land for sale than usual the past few years. Despite today’s slow land market, Farmers National Company is experiencing a 50 percent increase in the land it has for sale over its previous high volume.
The historic run-up in land prices during the decade leading up to and including 2013 faded in to the background as the past four years instead witnessed a steady and measured decline in values for crop and grazing land throughout the Midwest and Great Plains. Some regions experienced the decline sooner with a larger drop-off in land prices, whereas other regions saw less of a decline. Good quality land generally declined less while lower quality tracts saw weak demand and a bigger price decline. At this time, the market for quality land is steady to slightly stronger. So, what’s next for land values, up or down?
Randy Dickhut, AFM, senior vice president of real estate operations for Farmers National Company, said there are a number of positive factors supporting current land values.
“The industry has experienced a post-harvest bump in land prices in most grain producing areas. With above average crop yields in most locations, farmer optimism has increased as has the bidding for quality crop land. The supply of land on the open market remains low while the number of buyers and demand is adequate for what is on the market at this time,” Dickhut said.
Other factors also are providing support for today’s land prices, Dickhut noted. Continued low interest rates are helping create a demand for land as a long-term investment for individuals and institutional funds.
In general, there is still enough purchasing power in the hands of farmers to compete for good land or land that helps grow ones operation. We are also seeing a small increase in 1031 tax deferred exchange buyers as they move to trade into different land or to diversify out of other real estate holdings and into cropland,” Dickhut said.