Farmland Values Tepid, Yet Spot Buyers Abound

June 27, 2016 01:40 PM

Values of high-quality farmland in the central U.S. remain on a slightly downward trajectory in light of lower commodity prices, financial market conditions and the upcoming election, according to a new Farmers National Company survey of land values. Yet not all farmers are facing bearish near-term values – those in Washington, for example, are seeing a slight bump over values seen this past year as farmers and investors shift additional capital into well-irrigated acreage.

At the same time, prices remain “historically strong,” the company reports in a news release—a fact that isn’t preventing farmers from bidding when high-quality land becomes available for sale in their neighborhood.

“It remains highly sought after and pricing remains pretty stable mostly,” states Roger Hayworth, area sales manager for Farmers National, “while we see mid- to lower-level quality land decline 3% to 8%, depending upon the specifics of the subject property, such as tiling, soils and any improvements made.”

States in the survey enjoying a slight increase in per-acre values for high-quality land include Missouri ( $200) and Tennessee ( $150). Meanwhile, values remained relatively steady in states including Arkansas, Kansas, Kentucky, Oklahoma and Texas. Values slipped slightly in Michigan, Mississippi and South Dakota (-$100 each); a big more in North Dakota (-$400), Indiana and Iowa (-$500 each); and the most in Illinois (-$600), Minnesota (-$900) and Nebraska (-$1,500).


Overall, the company reports, farmers are being more cautious about purchasing additional land because of lower commodity prices. All of that is subject to change, though.

“Looking ahead, I believe we will continue to see sluggish offerings in this market and overall values swaying a little to stable until the end of the year,” Hayworth states. “If commodity prices move slightly higher during the second half of 2016, expect land prices to remain stable with higher quality, maybe even clicking forward a little.”

One notable exception to the overall downtrend in cropland and grassland is Washington, where the average June sale price per acre jumped up $2,500. There, farmers and investors simply want land that’s well-watered. Improvements such as grain systems and storage facilities aren’t moving the needle.

“Those other improvements are not getting them any more value,” states Flo Sayre, Farmers National Company real estate broker for Washington. “Farmers are just after the dirt.”

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Spell Check

bad axe, MI
6/27/2016 09:56 PM

  I get a kick out of some of these articles , one week there telling you the farmer is going broke renting land. The next week there telling you FHA needs more money for lines of credit because the farm debt ratio's are is bad as they were in the 80's. Now this article is smoke in mirrors. The truth of the matter is there still is 65 trillion in credit market debt in this country, 14 times high than it was in the last credit crisis of the 80's when it was 4.7 trillion. You would have to get $130,000.00 per acre for the 600 million acres of farm and pasture land in these country just to pay off the credit market debt in this country. Remember the federal government owes 19 trillion, the general public owes 46 trillion. $200,000.00 for every, man, women and child in this country. There is also $8,000.00 of interest due every year from everybody. This is why every bank is running after these FHA guarantee's on these farm loans. This is not going to be good when this comes apart like it did in the 80's


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