Farmland Prices Decline, Prices Vary by State

Click on image for larger view

A recently released economist’s report on farmland values reveals diminishing worth, although prices differ dramatically from state to state. An unrelated report from a farm-and-ranch real estate company suggests that this year’s harvest may be pivotal in reversing the decline.

In its monthly report on farmland values, Creighton University reported that prices have fallen for the 19th consecutive month, and that the rate at which they’ve fallen has accelerated. The index of farmland values is 31.1 in June, compared to 39.7 in May. Any score below 50 means a decline in values.

Professor Ernie Goss said Creighton’s report showed “a great deal of variation” among states. North Dakota was the only state among the 10 surveyed that showed an appreciation in land prices, rising to 56 on the index.

The sharpest decline was in Colorado, where the land price index fell from 29.1 in May to 21.8 this month.

Goss said the strong U.S. dollar is pressuring prices of agricultural commodities, which cuts farm income and negatively influences land values.

A commentary by the Farmers National Company, a real estate company for farmers and ranchers, said the volume of properties available for sale is down by 40% in the first six months of 2015 compared to 2013.

Randy Dickhut, Vice President of Real Estate Operations for Farmers National, said the stability of the market is maintained by a lower supply.

“Demand is still good for quality land,” he said. “The market just isn’t as aggressive as in the past few years so values are drifting sideways to lower.” Dickhut also said the harvest this year will be “pivotal” and “could impact the land market for several years.” S