Selective buyers vie for high quality farmland
In Iowa, top quality land is selling at more than $12,500 per acre, Minnesota values are reaching $9,500 per acre, and values in eastern South Dakota have reached $8,000 plus in many areas.
North Dakota and Northwest Minnesota
Buyers in the area covering North Dakota, eastern South Dakota and western Minnesota continue to seek out average to high quality land for purchase, according to Terry Longtin, area sales manager. The first four months of 2013 show land values and rent leveling off. However, the value numbers are still strong after 30 to 40 percent increases during 2012.
"We have experienced improved crop yields in the last few years, mainly due to improved crop varieties for this region, lead by corn, soybeans and sugar beets,” said Longtin. “This, along with last year’s net profits, has the demand for land outpacing supply.”
Most land is being sold to farm owner-operators, but investors are still seeking farmland due to the net returns in the region, according to Longtin.
Average to good quality land in the area is selling in the $4,000 to $7,000 range per acre, while excellent land is in the $7,000 to $9,000 per acre range. Top land in South Dakota is pulling up to $8,000 per acre, while North Dakota is coming in at $8,500 and Minnesota at $9,500.
Colorado, Kansas, South Dakota, Central/Western Nebraska and Wyoming After experiencing double-digit annual increases of up to 25 to 30 percent in land values over the past six years, Farmers National Company is currently seeing moderate to steady growth as land prices plateau throughout mid-year 2013, says JD Maxson, area sales manager for Farmers National Company in Colorado, Kansas, South Dakota, central/western Nebraska and Wyoming. While demand for high quality cropland and commodity prices still remain the motivating factors driving values; for the most part, land prices have stabilized throughout the first quarter of 2013.
“Rising land values have adjusted as a result of an increase in favorable returns on alternative investments,” said Maxson. “Consumer confidence is a reflection of the stock market’s recent positive upswing, so they are investigating other investments as well.”
Maxson anticipates a possible transition of investor capital away from the ag sector if returns in the financial markets remain strong. Moderate increases in land prices throughout 2013 are likely still due to the pressure of current commodity prices.
“Past history shows land prices have a tendency to parallel the market’s highs and lows,” said Maxson. “Recent news of planned ethanol plants closing in the area will likely impact commodity prices, as demand declines for ethanol-based grains. Corn planting was delayed due to late spring snow storms and below average ground temperatures, leaving a somewhat negative impact on yields and production.”