Price trends in agricultural land seem to be mixed, with some states posting higher prices and others posting lower prices.
A recent survey of prices by Farmers National Company showed prices across roughly 20 states vary from up 32% ($3,200) to down 42% ($2,000) from two years ago. At the same time, the Omaha-based land sales and management company says it is seeing a 21% increase in sales volume in 2017.
“The trend in today’s land market is hard to discern as some sales bring a better than anticipated price, while others may show a decline in value from previous sales,” said Randy Dickhut, senior vice president of real estate operations at Farmers National Company.
He said he expects land values in most areas will gradually decline over the next several years if commodity prices and the underlying farm incomes remain at current low levels.
“Small interest rate increases, potential tax law changes and world economic uncertainties will also keep some outside pressure on land prices in the coming year,” Dickhut added.
He also suggested financial stress could be an unknown influencer in ag land sales this year.
This large sales volume may be in line with expectations expressed in a Census of Agriculture survey and report on agricultural land ownership released in 2014.
Report authors suggested 10% of US farmland acres outside of Alaska and Hawaii, or about 91.5 million acres, would undergo ownership transfer by 2019, not including farmland that was in or expected to be put into wills.
The report also said landlords surveyed expect to keep or put nearly 48% of these acres in trusts. "Only 21 million acres of land are expected to be sold to a non-relative, while 26 million acres are expected to be sold to a relative or given as a gift. This means that only a small percentage of farmland will be available for new entrants into the farming sector," they said.
You can read highlights from the Ag Census report here.