What is in this article?:
- Market forces and strong commodity prices continue to create record demand and sales activity for farmland, but there are several unknowns that could impact the coming year
Western Farm Belt
The western region of the farm belt has experienced record volume land sales in the past year, according to JD Maxson, area sales manager for Farmers National Company in Colorado, Kansas, South Dakota, central/western Nebraska and Wyoming.
"Demand continues to outpace farmland coming on the market as sellers are reluctant to sell," said Maxson. "On the flip side, some sellers are capitalizing on hot market demand to get top dollar."
Huge increases in value are fueling the velocity of the current farmland market, according to Maxson. In addition, uncertainty of the market and economic factors is keeping the market active.
"Historically low interest rates are driving land buyers to enhance their portfolios and hedge against inflation," said Maxson. "Sales are being driven by the lack of available alternative financial sources, as well as the uncertainty in the financial markets."
Prices in these regions are ranging from $5,000 to $10,000 per acre for high quality tillable acres, with location, soils and topography dictating price.
Illinois, Indiana and Ohio
The East Central region has had bursts of farmland supply, but overall has seen a tight market, according to Roger Hayworth, area sales manager for Farmers National Company in Illinois, Indiana, Ohio, Michigan, eastern Kentucky, and eastern Missouri.
According to Hayworth, large farm owners continue to aggressively add acres, increasing their operations. Strong demand has stayed consistent over the past year with no foreseeable end in sight.
"The goal of farmer operators is to continue to control acreage," said Hayworth. "Productivity has showed continued signs of improvement and current cash rents have increased substantially in the past two years. All of these factors are driving values and sales activity in this area."
While owners are adding to operations, investors in the market continue to compete with these aggressive buyers, looking for that long-term investment, said Hayworth.
Top prices in the region can be seen in Illinois at $10,500 per acre on average for high quality land. These levels are followed by Indiana showing values up to $9,000 per acre, and Ohio which has reached $7,500 per acre.