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May 2012 Archive for Your Precious Land

RSS By: Mike Walsten, Pro Farmer

Mike Walsten has covered major business trends in agriculture for more than 40 years.

Land Pros See Iowa Farmland Values Increasing 14.6% in 2012

May 25, 2012

Mike Walsten

Iowa farmland prices are expected to rise 14.6% in 2012, according to a survey of 153 land professionals conducted Wednesday at the Soil Management and Land Valuation Conference sponsored by Iowa State University (ISU). The survey found those attending the conference expect the state average value of farmland to reach $7,688 an acre by November 1. For perspective, the ISU annual land values survey pegged the value of an acre of state farmland at $6,708 as of November 1, 2011.

The university has conducted the attendee survey in conjunction with the conference since 1964. The survey's track record has proven quite accurate with the only major variance occurring in 2008 when the financial market collapse struck in the fall. In 2010, the attendee survey missed the final ISU November 1 figure by just 3%. Last year, the attendee survey projected a 33% annual rise. The ISU survey found a 32.5% annual increase -- a miss of just 0.5%.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

Central Plains Farmland Values Increase 25% to 30%; Central Corn Belt Up 19%

May 21, 2012

Mike Walsten

The value of Central Plains cropland rose 25% to 30% on an annual basis through the first quarter of 2012, posting back-to-back 20%-plus increases for the first time in survey history. That's according to a survey of 235 ag bankers conducted by the Federal Reserve Bank of Kansas City. The Kansas City bank serves Kansas, northwest Missouri, Nebraska, Oklahoma and the mountain states of Colorado, northern New Mexico and Wyoming.

The value of dryland cropland rose 25% and irrigated cropland rose 30%, the bank reports, while the value of district ranchland rose 16%. On a quarter-versus-quarter basis, the value district dryland and irrigated cropland surged sharp 8% and 9% gains, respectively, the bank says. Ranchland values rose a strong 7%, compared to the fourth quarter of 2011.

Nebraska once again led farmland value gains for the district with increases of 38.6% for dryland cropland, 41.4% for irrigated cropland and 26.1% for ranchland. Kansas followed with gains of 24% for dryland cropland, 25.9% for irrigated cropland and 22.3% for ranchland. Northwest Missouri saw increases of 13.5% for dryland cropland and 7.1% for ranchland. Oklahoma reports an annual increase of 8.9% for dryland cropland and 6.1% for ranchland. The mountains states report increases of 17.4% for dryland cropland, 19% for irrigated cropland and 12% for ranchland.

The value of Central Corn Belt farmland increased 19% on an annual basis through March 31, 2012, according to the Federal Reserve Bank of Chicago. In addition, the value of "good" agricultural land rose 5% in the first quarter versus the fourth quarter of 2011, according to the survey of 231 agricultural bankers. The Chicago Fed Bank serves the northern two-thirds of Illinois and Indiana, all of Iowa, the lower peninsula of Michigan and southeastern Wisconsin.

Iowa continued to the lead the pack with a 27% annual increase, followed by Illinois with a 20% rise, Indiana with a 15% gain, Michigan with a 7% increase and Wisconsin with a 13% gain.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

Central Plains Farmland Values Increase 25% to 30%

May 15, 2012

Mike Walsten

The value of Central Plains cropland rose 25% to 30% on an annual basis through the first quarter of 2012, posting back-to-back 20%-plus increases for the first time in survey history. That's according to a survey of 235 ag bankers conducted by the Federal Reserve Bank of Kansas City. The Kansas City bank serves Kansas, northwest Missouri, Nebraska, Oklahoma and the mountain states of Colorado, northern New Mexico and Wyoming.

The value of dryland cropland rose 25% and irrigated cropland rose 30%, the bank reports, while the value of district ranchland rose 16%. On a quarter-versus-quarter basis, the value district dryland and irrigated cropland surged sharp 8% and 9% gains, respectively, the bank says. Ranchland values rose a strong 7%, compared to the fourth quarter of 2011.

Nebraska once again led farmland value gains for the district with increases of 38.6% for dryland cropland, 41.4% for irrigated cropland and 26.1% for ranchland. Kansas followed with gains of 24% for dryland cropland, 25.9% for irrigated cropland and 22.3% for ranchland. Northwest Missouri saw increases of 13.5% for dryland cropland and 7.1% for ranchland. Oklahoma reports an annual increase of 8.9% for dryland cropland and 6.1% for ranchland. The mountains states report increases of 17.4% for dryland cropland, 19% for irrigated cropland and 12% for ranchland.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

Survey: Iowa Cash Rents Rise 18% in 2012

May 10, 2012

Mike Walsten

Now we have numbers to put on what everyone has been talking about -- the state average cash rent in the state of Iowa rose $38 an acre, 18%, in 2012, according to an annual survey conducted by Iowa State University (ISU). The survey found the state average cash rent rose to $252 an acre. "This is the largest one-year increase since the statewide survey was started in 1994," states Willaim Edwards, ISU extension economist, who directs the annual survey. The second-largest increase was recorded in 2011 when the survey found a $30-per-acre increase.

"Average rents were higher in all nine crop reporting districts, with increases ranging from $57 per acre in north central Iowa to $16 per acre in south central Iowa." states Edwards. The $57-per-acre increase in the north central district represents a 26% increase. The $16-per-acre increase in the south central district represents a 9% increase.

High-quality land showed the largest increase in rents. Estimated rents for land in the high-third of each county increased by an average of 20%. but estimated rents on low-third quality row-crop land increased by only 15%. "In many counties, respondents indicated that typical rents were $400 to $500 per acre or more for the higher quality land," Edwards observes.

More than 1,400 responded to the survey of which 37% were farmers, 28% landowners, 16% professional farm managers, 16% lenders and 3% other professionals.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

What's Behind that Puzzling 5% Decline in Minnesota Farmland Values?

May 02, 2012

Mike Walsten

The median value of Minnesota farmland fell 4.9% to $3,443 an acre in 2011, according to an analysis of agricultural sales transactions reported to the state's Department of Revenue conducted by University of Minnesota ag economist Steven Taff. The figure calculated represents the median value of actual land sold. But the number of sales of high priced southern Minnesota farmland fell sharply in 2011, which resulted in depressing the state median price. For example, only 87 transactions were reported in the south west region for 2011, down from 266 transactions in 2010 and the lowest since 1990 when 408 transactions will be reported. In the south central region, 155 transactions were reported in 2011, down from 294 in 2010 and the lowest since 1990's 412. Same for the south east region which reported only 127 transactions in 2011, down from 198 in 2010 and 429 in 1990. For the state as a whole, only 1,115 acres were reported, down from 1,882 reported in 2010 and the lowest since 1990's 3,158.

In my mind, the news in this report is the confirmation of the sharp decline in the number of high-producing Minnesota corn/soybean farms offered for sale in 2011.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

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