Farmland values settle, grain prices at fault
They noted that all categories of farmland, determined by productivity increase, saw minor drops in values during the year. Aupperle explained that excellent land was down 2 percent -- “With less land available but very willing buyers;” good land was down 3 percent -- “Increased input costs are a concern;” average land was down 4 percent -- “Buyers are likely to be neighbors in the community;” fair land was down 7 percent -- “Popular category as land mix attracts residential, recreational and non-farm uses.”
Aupperle said that recreational land was steady-to-stronger across the state and there was some activity in transitional land near the metropolitan areas.
Local farmers are still the primary buyers with estate sales leading the way in reasons for selling as well as bringing properties to the market. Public auctions (43 percent) led the list of methods of selling followed by private treaty (36 percent), sealed bid (11 percent) and multi-parcel auction (10 percent).
Cash Rents Have Stabilized
Cash rents have stabilized, Schnitkey said. “Rents were slightly off the highs in 2013. This occurred because of the drop in commodity prices. We could be facing more cash rent declines if commodity prices are low in the fall this year.
“Assuming a price of $3.50 for a bushel of corn and $10 for a bushel of soybeans, 92 percent of our respondents expect cash rents to drop $10 or more per acre and no one expects to see rents to increase,” he noted.
“We are carefully watching the influence of commodity prices, weather and yields, interest rates, net farm income, the value of the dollar, alternative investments, ethanol and long term inflation among many other factors. Each will play a role in land values,” Aupperle concluded.
Other speakers on the program echoed the findings of the Land Values Report, copies of which are available for sale through the society web site at www.ispfmra.org.
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