Farmland prices in Minnesota showed a 5.4% year-over-year decline in 2017. The median per-acre price of farmland was $4,625, according to fiscal year sales data reported to the Minnesota Department of Revenue and analyzed by the University of Minnesota.
All but one of the state’s regions showed weaker farmland prices for 2017. The southwest region showed the highest median price per acre at $6,650, which is a 9.5% year-over-year decline. In the south-central region, the average price was $6,556—a nearly 8% drop. The west-central region was the one area to show a year-over-year increase. Farmland in that region averaged $4,145 in 2017, which was a 3.8% increase compared to 2016.
Farmers Face Profit Pressure
In 2017, farmers in Minnesota and surrounding states saw strong yields, according to the Federal Reserve Bank of Minneapolis. Those high yields helped to offset continued low grain prices, according to lenders surveyed in the Minneapolis Fed’s fourth-quarter agricultural credit conditions report.
However, farm incomes and capital spending continue to decrease in the region, which includes Minnesota, the Dakotas, Montana and the northern portions of Wisconsin and Michigan. Falling incomes also led to decreased loan repayment rates, while loan demand, renewals and extensions increased, the District reported.
Farmland values continued to fall in the District, but at a slower pace. For the fourth quarter of 2017, non-irrigated farmland values fell by an average of 1%, compared to a year earlier. Irrigated farmland values were roughly unchanged, while ranchland values increased by 3.5%.
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