Monday, October 03, 2016
Where do land values appear to be heading?
Land price movement has been in the forefront for farmers, landowners, lenders and land brokers for a decade now during the recent historic run-up in land values. Overall average values of crop ground and grasslands have slipped from the highs of several years ago, but are still historically strong in comparison to long-term trends. The question is: Where are land values heading over the next few years? “The agriculture land market is in a time of equilibrium as the supply of land for sale is fairly in balance with the demand to buy land,” according to Randy Dickhut, senior vice president of real estate operations for Farmers National Company, Omaha, Nebraska. “The supply of ag land for sale is generally on the low side of normal as some landowners are deciding whether to sell now or keep their land. Demand to buy land has trended lower over the past few years as buyers are being more cautious.” According to a survey of Farmers National Company agents, farmers and ranchers, who were the predominant purchasers of land that came on the market during the past decade, are not being as aggressive now when compared to recent years. Farm and ranch profits are down and lenders are being more careful in what they will lend on land purchases. Furthermore, investor interest in farm and ranch land declined as land values moved higher during the last four to five years and the return on investment slipped. But individuals and fund investors are moving back into the land market land prices soften...more