“Nothing short of exceptional.” That’s how Farmers National Company describes the agricultural land market over the last five years. According to the company, gains in value are prevalent across all classes of land in every region of the country. Strong commodity markets, moderate interest rates, buyer demand and an overall healthy agricultural economy have also supported the growth of land values during this time.
“Well, right now we’re sitting at what you would still call all-time record highs for US farmland. We’ve seen a real rapid rise here in about the last three plus years that is starting to level off at this point now due to several factors. But yeah, really at all-time high numbers,” said Jay VanGorden, Farmers National Company Area Sales Manager for the Eastern Region.
If you’re considering selling, he said things look good now and for the next few months.
“If you’re looking to sell, now would still be a good time to do it in the upcoming six months. Typically, prime selling season tends to be late summer, early fall and through the end of the calendar year, as that’s when crops are coming off, leases are terminating, and the buyer can most quickly gain control of the land from that standpoint,” he said.
It’s a different story for potential buyers, due, in part, to current interest rates.
“Interest rates are definitely a negative factor for buyers, as well as, for farm operators, declining grain markets down to about a 3-4 year low in the last few weeks. Along with inflation, those factors make the buying part a little tougher,” he explained. “You’re probably going to want to have at least part of that purchase, a fairly decent part of that purchase in cash, to really look at buying a property right now.”
However, VanGorden pointed out that while things may be more difficult for buyers right now, much of the land for sale is of high value.
“Right now, we’re seeing fairly level pricing for really high quality, high percentage tillable land,” he said. “Less productive farms that are in lower tillable, say 60, 70 percent tillable or lower quality soils, poorly drained farms are probably off 5 to 10 percent in the last 12 months.” According to Farmers National Company, with farm operators being the largest segment of land buyers, the biggest impact on land values moving forward will be profitability in agriculture.
Sabrina Halvorson
National Correspondent / AgNet Media, Inc.
Sabrina Halvorson is an award-winning journalist, broadcaster, and public speaker who specializes in agriculture. She primarily reports on legislative issues and hosts The AgNet News Hour and The AgNet Weekly podcast. Sabrina is a native of California’s agriculture-rich Central Valley.