Farmland values slipped some in the first half of 2019. But on the whole, the real estate market for cropland in eastern Kansas and the grain states of Iowa, Nebraska and South Dakota remained stable as values continue to slowly adjust to the current margin environment
The value of 71 benchmark farms tracked by Frontier Farm Credit and Farm Credit Services of America (FCSAmerica) declined an average of 0.83% in the first six months of 2019.
“Despite continued tight commodity price margins in 2018, real estate values remained stable and were supported by a favorable interest rate environment, market facilitation payments and equilibrium in the supply and demand levels for real estate,” said Tim Koch, chief credit officer for the alliance of Frontier Farm Credit and FCSAmerica.
Farmland values in eastern Kansas declined 3%, as a whole, in the first six months of 2019, the largest decline in Frontier Farm Credit’s and FCSAmerica’s latest benchmark farmland study. Compared to a year ago, cropland values are down 1.8% and pasture land is down 3.1%.
While Iowa farmland experienced a decline in 2019, values still are up 2.7% compared to a year ago. Modest declines in Nebraska and South Dakota in the later half 2018 extended into 2019 for a drop of 1.4% and 1.3% since last July.
|State (No. of benchmark farms)
|South Dakota (23)
Three of the seven benchmark farms in eastern Kansas lost some value in the first half of 2019, two increased and two showed no change.
Of Iowa’s 21 benchmark farms, 10 decreased in value, three increased and eight saw no change. Ten benchmark farms in Nebraska lost value, five increased and three were unchanged. In South Dakota, values dropped on five farms. The remaining 18 farms held even. Wyoming continues to see values for cropland and pastureland increase. However, the limited number of farmland sales in the state makes it difficult to accurately track trends.
Farmland sales across the Associations’ territory were down in the first two quarters of 2019 compared to the same period in 2018. Sales in eastern Kansas fell by more than 52%, although public auctions were up 6% compared to the first two quarters of 2018.
South Dakota saw 26.7% fewer sales. In Iowa, sales were down 11%, while Nebraska’s combined sales for irrigated and dry cropland dropped 18.4%.
The average quality of land has not changed in the past year, and buyer demand for high quality ground remains strong.