Survey: U.S. farmland values outpaced by overall land values

The survey, which measured the 12-month interval ending in September 2017, discovered that the worth of all U.S. land rose three %, led by a 5 % improve in residential land.

In distinction, the worth of irrigated agricultural land rose by 2 % and the worth of non-irrigated ag land rose by 1 % in the identical interval. The survey attributes the ag will increase “to commodity costs (which) usually stabilized from late 2016 to early 2017 after slumping since 2014.”

Residential land gross sales rose 5 % from September 2016 to September 2017, with business land gross sales rising four %.

In distinction, gross sales of each irrigated ag land and non-irrigated ag land each rose 2 % within the interval.

“With flat commodity costs making the expansion in ag land gross sales modest in comparison with residential and business land gross sales, it is encouraging to see the market as an entire nonetheless proceed to strengthen,” Jimmy Settle, nationwide president of the Realtors Land Institute, stated in a written assertion.

The survey, which had greater than 800 respondents, tasks that U.S. ag land values will rise 1 % from September 2017 to September 2018. In distinction, general land values are estimated to rise three %, with residential and business land every projected to rise four %.

The survey’s projected improve in 2018 ag land values — and the rise in land values from September 2016 to September 2017 — would look like at odds with anecdotal reviews that poor crop costs put continued downward strain on Higher Midwest farmland values and rental charges.

However decrease enter prices, excessive yields and continued low rates of interest have helped to help farmland values and rental charges, at the least in Minnesota, Terri Jensen, an Accredited Land Advisor who owns and operates MN Land Actual Property & Public sale in Northfield, Minn., and the 2015 nationwide president of the Realtors Land Institute, a Chicago-based mostly skilled group, stated.

Two different issues to think about:

Ag economists and ag bankers typically say that farmland rental charges are “sticky,” which signifies that rental charges do not rise as quick or as a lot as farmland values. So the present upturn in farmland values seen within the Realtors Land Institute survey will not be mirrored instantly — or ever — in rental charges.

Ag officers additionally say the Higher Midwest typically lags nationwide tendencies.

To see the complete Realtors Land Institute survey:

‘Unknowns are key’

Predicting the course…

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