This analysis is provided by Corey Prins AFM
The first half of 2018 was marked by a steady to slightly stronger land market for farms with high quality soils, good drainage and excellent farm ability. Farms with average soils, below average drainage and less than perfect farm ability were 3-6% lower during the first half of 2018.
Southern Minnesota experienced an extremely wet growing season with some areas receiving their annual average precipitation in a two-month period in June and July. Well drained farms at the top of the watershed farms were not severely impacted by the above average precipitation. However, low-lying farms, farms with below average drainage, and farms located adjacent to a drainage ditch or creek that flooded lost a high percentage of their tillable acres this year due to drowned outs which will significantly reduce field average yields.
The impact of weather conditions in June and July combined with lower commodity prices is resulting in a slightly weakening market for prime quality farms and more significant discounts for lower grade quality properties. Prime quality farms will bring $7,500-9,000 per acre while average quality farms are in the $5,500-7,500 range.
Inventory of properties for sale as we enter the fourth quarter of 2018 is increasing. Final yield results, length of time tariffs are in place, local supply of land, and interest rates will impact future property values.