Merrill Swanson of Dugger, Canaday, Grafe, Inc., San Antonio, Texas, reported on farmland values in Texas, New Mexico, and western Oklahoma.

Texas’ extreme drought has had an impact on farmland values over the last year. Swanson reported steady to uneven land prices for medium and lower quality land yet a price uptick for better land quality with good water.

The drought has brought sales of cropland with weak irrigation water almost to a halt. Most land sales are private treaty through brokers.

After the recession began, Swanson said farmland sales volume dropped almost in half. Land values dipped from 10 to 20 percent. Sellers reduced prices to sell land.

“In Texas, I think our farmland (value) has increased a little bit in 2011,” Swanson said.

In New Mexico, Swanson reported reduced sales activity this year versus last year.

Sellers of Southern Plains farmland are typically third-generation owners or those who bought land five to eight years ago. Buyers include investors diversifying assets and farmers who generated good profit in recent years.

“Despite the Texas drought, I believe high commodity prices will likely offset production losses and keep land values steady to slightly higher particularly if the drought appears to ease,” Swanson said.

Land rental rates in the Southern Plains are strong for available grass or hay acreage. The trend is toward more cash leases yet crop share remains popular.

Panhandle cropland leases average from $200 to $220 per wet acre for pivot-irrigated land with good water, $150 to $175 per wet acre for pivot irrigation with average water, and $85 to $125/acre for pivot land with weak water depending on equipment.

Farmland buyers include farmers who want to expand the operations.