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
Arkansas, Mississippi and Tennessee
Activity in the Mid South remains brisk, fueled by low supply and high demand. Once properties hit the market, they are selling briskly.
"We have seen dramatic price increases in some areas," said Keith Morris, area sales manager for Farmers National Company in Tennessee, Mississippi, Arkansas, Alabama, western Kentucky, Louisiana, and southern Missouri. "Prices are still trying to move up, but cash rents are nearly topped out in this area minimizing returns."
Investor purchases are dominating the market, followed by farmer sales. "All buyers are investing for strong returns and stability," Morris said.
Prices for top farmland are averaging $3,800 per acre in Arkansas, $3,500 per acre in Tennessee and $3,800 per acre in Mississippi.
Land Values in the Columbia Basin and Eastern Washington have escalated to the highest on record, according to Flo Sayre, real estate broker for Farmers National Company in Pasco, Washington. Similar to Midwest corn and wheat land values, dryland prices have also reached all-time high prices.
"Irrigated land has increased approximately ten to twelve percent in the past year to eighteen months," said Sayre. "Sellers are still holding tightly to the land as an income stream, while buyers are clamoring for more land. This is leading to bidding wars between buyers."
According to Sayre, the bulk of sales are going to farm operators buying neighboring land, with investors looking for a stable investment. Cash rents have increased ten to 20 percent in the region.
Prices for farmland are reaching $8,500 per acre, with isolated sales nearing $10,000 per acre.