Critical Window for Farmland Values

Outside influences such as investor interest, changes in U.S. trade policy, unexpected consequences from tax laws and potential changes in the next farm bill could also send farmland values south.
( Top Producer Magazine )

Above-average crop yields created optimism for farmland prices last fall. That post-harvest bump combined with a short supply of land for sale and continued low interest rates have propped up values in many locations, says Randy Dickhut, senior vice president of real estate operations for Farmers National Company (FNC).

“In general, there is still enough purchasing power in the hands of farmers to compete for good land,” Dickhut says. “We are also seeing a small increase in 1031 tax deferred exchange buyers as they move to trade into different land or to diversify out of other real estate holdings and into cropland.”

But, land values face some serious headwinds. Current farm economics are not conducive to strength in the land market, as low grain prices are keeping overall farm income levels depressed, Dickhut explains. As a result, lenders are hesitant to lend money for land purchases.

“Cash flow and equity concerns of farmers could generate additional land for sale in the market as some producers liquidate either land or equipment to shore up their finances,” he says. “The magnitude of these additional land sales will probably be small and vary by region, but the potential for an increase in the supply of land on the market bears watching.”

Outside influences such as investor interest, changes in U.S. trade policy, unexpected consequences from tax laws and potential changes in the next farm bill could also send farmland values south.

“The next six months will determine the direction of land values,” Dickhut says. “Economic and financial factors will become more evident for producers and lenders. The factors and the outside influences will become better defined as we move through 2018.”

 

HighQualityLandValuesByState

For the first time in the history of the survey (data collection began in October 2015), more producers expect farmland values to increase in the upcoming year than decline.

© Farmers National Company Agent Survey

 

Here are state-level insights from FNC’s semiannual market update.

The Dakotas, Minnesota. Good to high-quality land in the three-state region is seeing steady to slightly higher values. “Farmers are interested in adding the right type of acres to their operations and seem willing to bid up to get the land purchased,” says Brian Mohr, area sales manager. Conversely, range land in western South Dakota has not seen the buying interest or strength in prices.

Eastern Corn Belt. Quality is king in the eastern Corn Belt. “Prices for good land are steady to slightly stronger when compared to the same time a year ago,” says Roger Hayworth, area sales manager. “The low supply of properties on the market helps support land values.” Farmers are the primary buyers of land in the region, but Hayworth notes, investor interest has increased.

Iowa. Despite reduced farm incomes, demand for high-quality cropland in Iowa remains strong. “Buyers of farmland are being more deliberate about their decisions, but farmers and investors are very interested in purchasing the right piece of ground that makes sense for them,” says Sam Kain, national sales manager. “Lenders are being more cautious in the amount of money they will lend on a land purchase, but there is still enough capital in the country to create demand for good land.”

Nebraska. Sales activity is high in Nebraska and good-quality land is selling well, but lower-quality cropland or grassland is struggling to find buyers, notes Paul Schadegg, area sales manager. “Some additional sales are expected before planting time from financially motivated sellers as the farm economy struggles with low grain prices,” he says.

Kansas, Oklahoma. The land market in Kansas and Oklahoma is slow, Schadegg reports. “There is less land for sale than normal and buyers continue to be more cautious in making purchase decisions,” he says.

Texas. The land market in Texas remains steady. “The diversity of land in Texas, the wider range of buyers and the varied uses for land all contribute to the land market being more stable here,” Schadegg says.

Washington, Oregon, Idaho. Location and quality drive values in these states, reports broker Flo Sayre. She expects to see increased interest in selling land from aging farmers and potentially financially motivated sales.  

 

Comments

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
Submitted by prakashchandra on Tue, 03/20/2018 - 00:01

Now in days cooking became the passion in young generation they are trying with zeal to learn the different process papas games so without wasting the time just get it and show your talent.

Submitted by nfl jerseys on Fri, 04/13/2018 - 21:16

The NFL jersesys shop scene of the postseason Saints's regrettable exit last year is still vivid. Defensive end-user Cameron Jordan believes that if the defense team is stronger then the SaintsShop NFL Jerseys By Team may get the Super Bowl. Into the offseason, Jordan has been trying very hard to recruit Endem Kong Su, but he was disappointed that Sue eventuallyBuy Custom NFL Jerseys chose the Lost and Lost Los Angeles, he chatted endlessly in the interview complained that Su could not wear the black shirt. "The ability Shop NFL Hatsto introduce players like Su is definitely a huge improvement, but it's clear he's more interested in Los Angeles." Jordan said in a live interview: "I'mShop NFL T-Shirts not saying I'm disappointed but just feel a bit sorry. The experience of the past year has given I know a lot, I think we had a chance to recruit him, butShop NFL Hoodie
I didn't succeed.San Francisco 49ers Jerseys I think we can go fishing in the weekend in Louisiana, we can do everything and we can take him everywhere. The Super Bowl is even Philadelphia Eagles Jerseysmore eager to go further in the playoffs. The Rams have done a lot of big things during the offseason and will be our strongest Customized New England Patriots Jerseysopponents." It's a partnership with a defensive beast like Su that I believe is a dream for any player. Cameron JordanCustomized Cincinnati Bengals Jerseys also used to make a double-ghost match with Su, but in the twinkling of an eye, Su chose the league's best defensiveLos Angeles Rams Hats player, Aaron Donald, and turned from a teammate to an opponent. "I want to say that our defense was very good last year, but he needs aAtlanta Falcons Hats strong core. I just want more powerful teammates." Although he did not win the Soviet Union, the biggest thing the Saints team did during Jacksonville Jaguars Hoodiethe offseason was Renewed quarterback Drew Bliss, considering that Brisbane is 39 years old, the team has to find his successor.Washington Redskins Hoodie Judging from the team’s 27th pick, they have only two excellent quarterbacks. One is Lamar Jackson of the University of LouisvilleTennessee Titans Hoodie and the other is Mason-Lu of Oklahoma State. Astoria. If you are the Saint General Manager, then who would you choose? Cameron JordanDenver Broncos T-shirts gives such an answer. "If I'm looking for a future quarterback, then I'll give him the same treatment as Aaron Rogers. Let him learn aChicago Bears T-shirts few years behind Brisbane, and then let him play." Jordan pulled in the screen Mar-Jackson said that he clearly pointed out that the reporterArizona Cardinals T-shirts soon realized this: "Are you talking about Lamar Jackson?" Jordan joked: "No, no, no. I mean Sheldon-Jenkins of Louisville. "We Kansas City Chiefs Hatsknow that a few months of predictions may become meaningless in the hours of the NFL draft show. I don't know how Lamar Jackson willCustomized Jacksonville Jaguars Jerseys feel when he hears Cameron Jordan's remarks. Lang has a good intention, and the Saints also want to prevent the otherPittsburgh Steelers Jerseys team from winning.