Home News Michigan Ag News Farmland Values Continue to Rise Across the US

Farmland Values Continue to Rise Across the US

Photo: C.J. Miller / Michigan Ag Today.

There has been an uptick in land values across the U.S. over the past 12 months according to Farm Credit Services of America. Tim Koch, FCSAmerica’s executive vice president of business development, says the biggest gains in land values have been in Iowa.

“Those based on our metrics are about [a] 30 to 35-percent increase range,” according to Koch. “As we look at the same result for Nebraska, we show about a 25-percent increase over the prior 12 months ending June 30, 2022.  “[If] you look a little more recent, the first half of 2022, [we were] still showing gains across all those markets but at a much lesser amount.”

Koch says the demand is being driven by producer profitability and other factors.

“[Those factors include] the amount of available real estate to sell, the whole supply and demand approach to that, and the demand has been really strong,” says Koch. “In some markets, we’ve seen really good supply, and in others where it’s been a little tighter market, that’s where we’ve seen even higher sales.”

In areas where the demand or value is flat or even decreased, such as in Western Nebraska, the main issue is drought, which Koch says tends to constrain optimism. He says another factor could be interest rates and profit margins.

“The other thing I think we want to pay particular attention to is what are profit margins doing in agriculture? Crop prices remain very strong from a pure price perspective with the inflation in input cost [and] increasing interest rates, we are seeing those margins start to tighten.”

Koch says high land values can be good for some and not so good for others, especially if you need to rent land. He adds producers anticipate significant increases in cash rents this fall. For example, in the first six months of 2022, Wyoming saw an increase of 22.4 percent in pasture units.

Click BELOW to hear C.J. Miller’s news report on the rise of farmland values across the U.S.

Source: NAFB