Farmland prices continue rising at an amazing pace

The increase in farmland values over the past year continues to amaze both farmers and investors. And even more amazing is the fact that land continues to move quickly, despite the higher prices. “What surprises us is the rate of increase over the last 12 months,” says Lee Vermeer, vice president of real estate operations for Farmers National Company, Omaha, NE. “Values are up 20 to 25 percent, compared to rises of five to 10 percent in 2010. We are looking for 2012 to be another profitable year for those selling land.” If you’re thinking of selling farmland, it’s likely a realtor will encourage you to offer the land at auction. Farmers National Company, for instance, has seen record auction activity during the last six months as more properties are being sold at auction to maximize profits. Tight supply of quality land has also prompted buyers to look at less productive land that can be upgraded, Vermeer says. Strong grain prices are boosting profits for farmers, prompting them to pursue land in order to expand operations, In addition, cash rents in top production areas have increased 25 to 40 percent during 2011. “Farmers make up 75 percent of the buyers in the market, despite continued strong interest from investors,” Vermeer says. “Land continues to be a tangible investment that has performed well, thus the demand.”...more