Survey: Nebraska Agricultural Land Value Drops 3%

 
Survey: Nebraska Agricultural Land Value Drops 3%

The average value of Nebraska's agricultural land dropped 3 percent in the past year, a decline fed largely by continued pessimism over grain prices, according to a preliminary survey report released Wednesday.

The University of Nebraska-Lincoln report said that as of Feb. 1, the statewide land value was $3,210 an acre on average, compared with $3,416 a year earlier. It was the first statewide drop in six years, survey organizers said.

Respondents included real estate salespeople and brokers, appraisers, bankers and mortgage experts.

In the report, university Extension educator Jim Jansen said "bearish comments reported by survey participants" on cropland values reflected the decline in grain prices.

Last month, the U.S. Agriculture Department said crop receipts were expected to fall nearly 8 percent this year, driven by lower grain prices. Corn, for example, was at a record high, exceeding $8 a bushel in summer 2012, but corn has been trading around $4 or under recently. Soybean prices have undergone similar declines.

The new university report generally echoed findings by the Federal Reserve Bank of Kansas City, Missouri, which cited fourth-quarter farmland value declines of 3.4 percent for dryland property in Nebraska and 3.1 percent for irrigated land.

In southeast Nebraska, where the university report cited a drop of 5 percent in farmland values, Falls City real estate agent Brian Poppe said he's noticed a downward drift.

"We're seeing probably actually a 10 percent drop where you don't have strong landowners" as neighbors, Poppe said. Buyers like to locate next to well-tended properties, he said.

Nebraska land used for the cow-calf industry rose in value or held steady, the university report said, "due to a strong return in that market over the last one to two years." For example, in north-central Nebraska, where ranches dominate much of its Sandhills area, land values rose 7 percent, to $1,300 acre.

"Cattle prices are still very good," said Roger Wilson, a farm management budget analyst at the university. "Just like corn prices affecting the farm prices, cattle prices affect the ranchland."

Cash rental rates for pasture in all regions rose, the university report said, ranging from 4 percent in the north to 34 percent in the central and southwest parts of the state.

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Comments

 
Spell Check

Jo Windmann
Mexico, MO
3/5/2015 12:50 PM
 

  Lanny, thanks for reading and for pointing this out. It gives us a chance to explain how these numbers are figured. The discrepancy is due to the study measuring multiple areas of the state, and then taking a weighted average based on volume of acreage in each area. So while on the surface, $3,416 per acre to $3,210 looks like a 6% drop, you still have to factor in the weighted average. You can read UNL’s full report here: : http://agecon.unl.edu/2015-trends-in-nebraska-farmland-values-and-rental-rates?utm_content=buffera8270&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 
 
Dave Johansen
Syracuse, MO
3/5/2015 05:30 PM
 

  As journalists lets not too pessimistic about falling land prices and cause the problem to get even worse. The 3% drop in Nebraska is a drop from all time record highs. I think this number signals there is still strong demand for good quality, well located farmland.

 
 
Lanny
fremont, NE
3/5/2015 08:31 AM
 

  either somebody is mathematically challenged or their writing skills are deficient given these facts. a decline in average land value from $3416 to $3210 per acre is a 6% drop, not 3 as written. Agweb should be commended since they at least got the average values correct - the Omaha World Herald couldn't even do that correctly. Are those shortcomings artifacts of our educational system in the US or simply another attempt at literary excellence?

 
 

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