What is in this article?:
- Demand at five-year high.
- Spurred by profitable crop prices.
- Seen as investment opportunities.
Colorado, Kansas, South Dakota, Central/Western Nebraska and Wyoming
The western region of the farm belt is currently seeing more of a demand for quality land than ever before, reported J.D. Maxson, area sales manager for Farmers National Company in Colorado, Kansas, South Dakota, central-western Nebraska and Wyoming. “With the volatility of the stock market and CD rates historically low, I’m not looking for a farmland market correction any time soon,” Maxson said.
“In my opinion, investors will continue to look at land as a hedge against inflation and a sound investment tool with a proven rate of return. Our clients’ lack of confidence in the financial markets, along with the current CD and interest rates, is reducing motivation to put retirement funds on deposit.”
Buyer demand for high-quality property continues to increase as sellers’ inventory continues to shrink. According to Maxson, recent land auctions have been well attended with active bidding at 10 to 15 percent above market value. Local owner/operators are winning the bulk of the bidding.
High commodity prices and continued global demand for protein are currently driving the market, according to Maxson. “Land prices show a definite variation with location and quality as key indicators.”
Sale prices of irrigated cropland throughout central, eastern and western Nebraska vary greatly depending on access, location and water, according to Maxson. For example, wet pivot acres range from $2,500 per acre in western Nebraska to $6,000 — $6,500 per acre in central and east central Nebraska. At a recent land auction property sold at more than $8,000 per acre.
Looking at western Nebraska, prices range from $500 — $650 per acre for average cropland to $1,850 per acre for land in the east river area of South Dakota, with irrigated land in southeastern South Dakota averaging $6,500 per acre, said Maxson.