After five years of declines, the value of an average acre of Nebraska farmland rose 3% versus a year ago. That’s according to data collected by Feb. 1 and released to preliminary findings from the 2020 Nebraska Farm Real Estate Market Survey.
The gain pegs the price of an average acre of farmland at $2,730. It marks the first increase since prices peaked at $3,315 per acre in 2014.
A limited supply of land for sale, strong demand for purchases and disaster assistance payments made to operators were driving forces providing stability to the market values, according to Jim Jensen, ag economist, University of Nebraska-Lincoln. Jensen conducts the annual survey along with colleague Jeff Stokes.
Crop and grazing land market values rose gradually, compared to 2019. The estimated market value of dryland cropland increased approximately 3% to 4% with the central, east and southeast crop reporting districts listing gains exceeding 5%. Declines were noted in the northwest and southwest districts, where unpredictable rainfall and regulations have placed moratoriums on the development of additional irrigated acres by producers.
On a regional level, all areas of Nebraska saw average cropland increase in value, except for the Southwest region, which saw a 1% decline versus 2019.
Values based on type of land in 2020 include:
- Dryland Cropland (no irrigation potential): $3,165 (a 4% increase from 2019)
- Dryland Cropland (irrigation potential): $4,140 (a 3% increase from 2019)
- Grazing Land (tillable): $1,250 (a 5% increase from 2019)
- Grazing Land (nontillable): $830 (a 4% increase from 2019)
- Hayland: $1,645 (a 2% increase from 2019)
- Gravity Irrigated Cropland: $5,780 (a 2% increase from 2019)
- Center Pivot Irrigated Cropland: $6,120 (a 3% increase from 2019)
Rental rates for cropland and grazing land saw gradual increases in 2020 versus those reported the prior year.
Dryland and irrigated cropland reported steady to slightly higher averages across the state. The rise in dryland rental rates ranged from 2% in the northwest to 10% in the south except for a 3% decline in the southwest district. Irrigated rental rates were more mixed as rental rates trended up on average from about 5% to 8%.
Declines of 3% to 5% were noted in the northwest district. Uncertainty with sugar beet production in cropland rotations served as a negative force weighing down this market.
Cash rent for dryland cropland ranges from $28 per acre in the Northwest to $220 per acre in the Northeast.
Pasture and cow-calf pair rental rates trended up across Nebraska in 2020, ranging anywhere from 1% to 12%. The northwest, northeast, central and east districts led the increases in rental rates. The extent of flooding or damages from 2019 will still have impacts on stocking rates and grazing practices in certain areas for 2020, according to respondents.
Cash rent for pasture from $18 per acre in the Northwest to $63 per acre in the Northeast.
The University of Nebraska-Lincoln, Department of Agricultural Economics annually surveys land industry professionals across Nebraska including appraisers, farm and ranch managers, and agricultural bankers.