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Farmland Values Up, Sales Down in 2023

Farmland values increased nearly 3% in the last six months of 2023 for a total gain of 6% year over year in states served by Farm Credit Services of America (FCSAmerica) and Frontier Farm Credit.

Limited sales of farm ground and continued buyer interest contributed to much of the gain in eastern Kansas, Nebraska, South Dakota and Wyoming. Iowa values stabilized, a possible signal for the 2024 real estate market.

FCSAmerica and Frontier Farm Credit, which are jointly managed, appraise 70 benchmark farms twice a year to track real estate trends in the states they serve. The two Associations release their findings every January and July.

In a recent installment of our webinar series, Two Economists and a Lender with Agriculture Economic Insights (AEI) co-founders David Widmar and Brent Gloy and Kirk Manker, VP chief appraiser, we discussed the latest in farmland values. The webinar recording from January 26 is available.

The chart below shows value changes for all 70 benchmark farms based on average dollar per acre.

Market Trends in Benchmark Farmland Values 2009 to 2023

State-by-State Values

Kansas Farmland Values

Eastern Kansas experienced the greatest gains in 2003, with values rising 7.3% during the last six months and 13.9% year over year. Cropland values increased an average of 3.8% during the most recent six-month period, while pastureland went up 11.9%. For the year, cropland was up 11.6% and pasture, 17%.

Kansas Benchmark Farmland Value Trends

These increases reflected a tight land market. Sales in 2023 were down 30% compared to 2022. Southeast Kansas, however, did see a wider range of sales in the last half of the year.

Nebraska Farmland Values

Nebraska’s values increased 4.4% in the most six months and 7.8% for the year. Cropland values were up an average 4.2% and pastureland 5.9% during the last six months. Year-over-year, values rose 6.2% and 5.4% for cropland and pasture, respectively. Sales were down nearly 12% for the year.

Nebraska Benchmark Farmland Value Trends

South Dakota Farmland Values

South Dakota saw an overall improvement in benchmark values of 2.7% in the last six months and 7.5% for the year. Values increased an average of 3.4% for cropland in the last six months compared to 6.3% for the year. Pastureland was up 4.3% in the last half of 2023 and 16.2% year over year, with strong sales in the early part of the year. Cropland sales fell 31.3% in 2023.

South Dakota Benchmark Farmland Value Trends

Wyoming Farmland Values

Wyoming’s benchmark values rose 2.3% in the last six months and 3.1% for the year. The cropland market was stable in early 2023, gaining 4.6% in value in the last part of the year. Pastureland improved a modest 1.5%, with drought taking a toll on herd numbers.

Wyoming Benchmark Farmland Value Trends

Historically, Wyoming has limited sales of agricultural ground. Activity was even lower in 2023 – down more than 50% for the year, although not all end-of-year sales have been recorded.

Iowa Farmland Values

Unlike other areas, Iowa’s benchmark farm values were essentially unchanged, ticking up 0.1% in the last six months and 0.5% for the year. Sales activity was down 21% compared to 2022.

Iowa Benchmark Farmland Value Trends

Iowa is generally on the leading edge of real estate trends, said Tim Koch, executive vice president of business development for FCSAmerica and Frontier Farm Credit. When farmland values began to increase in 2020, Iowa was first and quickest to reach all-time highs. Values have now been flat for a year, he said, “and we likely will see greater stabilization in other markets in the next six months.”

“When farmland values began to increase in 2020, Iowa was first and quickest to reach all-time highs. Values have now been flat for a year.”
– Tim Koch, executive vice president of business development for FCSAmerica

Iowa benchmark values have settled at near-record highs. Values in all the states served by FCSAmerica and Frontier Farm Credit are at or near record highs.  

The graph below shows trends in benchmark cropland values by state.

Benchmark Cropland Value Trends

Trends in pasture values for each state are shown in the following graph:

Benchmark Pastureland Value Trends

Forecast for Farmland Values in 2024

Looking ahead to 2024, Koch said, agricultural balance sheets remain strong after several years of high profitability, and the real estate market will continue to benefit from buyers who have the financial capacity to act when the right ground comes on the market.

While interest rates are expected to drop some, this is unlikely to influence the market. Historically, interest rate changes affect buyer decisions. But the rapid increase in rates in late 2021 into 2022 had little impact, as profitability and financial strength of potential buyers continued to drive the market higher, Koch said.

Profits are expected to drop in 2024, with producers planning for lower commodity prices and a possible return to break-even levels, which will temper further increases in real estate values, he said, adding weather remains a big variable for the year.

In this economic environment, he said, it’s important to preserve working capital and manage debt.

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