Fifth Annual Drop for Nebraska Farmland Prices

April 3, 2019 09:03 AM
 
The market value for farmland in the Cornhusker state dropped again in 2019. The average per-acre value is $2,650, a 3% drop from 2018.

The market value for farmland in the Cornhusker state dropped again in 2019. The average per-acre value is $2,650—a drop of 3% from 2018, according to the preliminary results of the 2019 Nebraska Farm Real Estate Market survey. This marks the fifth consecutive year of lower values.

Overall, Nebraska farmland prices have dropped 20%, since reaching a high of $3,315 in 2014.

Long-Term View of Nebraska Average Land Values

1978-2019

Historic Nebraska Average Land Value 1978-2019

In the Southwest district of the state, farmland values posted a 6% year-over-year drop—the largest of any district. The South and Northwest districts each declined by 4%, followed by the Northwest and North, where values each dropped by 3%. The Central and Southeast districts show 2% year-over-year drops, while the East district declined by only 1%.

2019 Nebraska farmland values

All of the seven land classes dropped in value, compared to last year:

  • Dryland Cropland (No Irrigation Potential): -2%
  • Dryland Cropland (Irrigation Potential): -3%
  • Grazing Land (Tillable): -4%
  • Grazing Land (Nontillable): -4%
  • Hayland: -3%
  • Gravity Irrigated Cropland: -1%
  • Center Pivot Irrigated Cropland: -2%

Survey participants pointed to current trade issues and property tax policies as the two most negative forces driving farm real estate values down, says Jim Jansen and Jeff Stokes of the University of Nebraska.  

Softer Rental Rates

Rental rates for cropland and grazing land in 2019 showed gradual declines for most land classes. Average cropland rental rates for irrigated and dryland production reported declines ranging from about 1% to 5% across the state, while a few districts saw increases of 2% to 5%. 

Pasture and cow-calf pair rental rates were mixed to steady depending upon the district. Most regions saw declines of 2% to 7%, while other areas saw increases from 1% to 5%. 

“Many absentee or retired landowners appear to have rising property tax liabilities while trying to achieve a positive return on their assets,” Jansen and Stokes report. “Agricultural operators seeking to produce commodities above breakeven prices face tight margins with low prices.”

This annual survey, conducted by the University of Nebraska-Lincoln, polls appraisers, farm and ranch managers and agricultural bankers. Final results from the survey will be published in June 2019 at http://agecon.unl.edu/realestate.

 

Read More

Nebraska Panel Advances Farmland Property Tax Measure

3 Wildcards for Farmland Values

Midwest and Mid-South: Farm Income Down, Farmland Values Up

Farmland Supply Overshadowing Demand

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Comments

 
Spell Check

Chuck
Jordan, MN
4/3/2019 12:45 PM
 

  The long term view of Nebraska land value chart makes me very nervous, especially if you believe any of the research done by Robert Schiller regarding farmland prices over the last 100 years. If commodity prices remain down for a couple more years, it wouldn't surprise me to see Nebraska farmland drop another $1000/acre. I'd recommend extreme caution in this environment. Something has to give if the average farmer is losing $100/acre on rented property.

 
 
canrancher
Kearney, NE
4/3/2019 07:10 PM
 

  Given that our legislature will not do anything about our insane level of property taxes, the only thing that will help out is falling land prices. And they need to fall a long way from where they are today. My farming operation pays more than $60,000.00 in property taxes-which is more than I get to keep after paying those taxes. That is not sustainable long term.

 
 

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