According to the 2017 Nebraska Farm Real Estate Market Survey, conducted annually by the University of Nebraska-Lincoln, weighted average farmland values have slipped by about 10% compared to 2016. This is the third consecutive year of decline.
Statewide, farmland value averaged $2,805 per acre. Farmland values peaked in 2015 at $3,315 per acre. Declines ranged between 15% in the southeast part of the state to 8% in the northwest part of the state. Survey respondents listed lower commodity prices and concerns about water resources as chief reasons for the declines.
“Survey participants expressed the availability of water for irrigation and policies guiding the utilization of this resource as potentially negative forces in the market value of these two land classes [gravity- and pivot-irrigated] into the future,” writes Jim Jansen, agricultural systems economist in the UN-L’s Agricultural Economics newsletter.
Rental rates also slipped in 2017, ranging from 4% to 9% lower than 2016 rates.
“Negotiating an equitable rental rate remains a challenge for landlords and tenants,” Jansen notes. “For the second year in a row, survey participants noted this dynamic in negotiating rental rates centered on these concerns.”
Related expenses from land ownership, such as rising property taxes, represent a major factor that continues to influence rental rates, Jansen adds.