Nebraska Farm Real Estate Values Increase for First Time Since 2014
Nebraska agricultural land values increased 3% over the last year, to a statewide average of $2,725 per acre, according to the final results of the University of Nebraska–Lincoln’s 2020 Farm Real Estate Report. This marks the first annual increase since land values in the state peaked at $3,315 per acre in 2014.
Survey participants reported that 1031 tax exchanges, non-farmer investor interest in land purchases, and current interest rate levels contributed to higher market values. These forces were reported as slightly positive in impacting future land values prior to the domestic outbreak of COVID-19.
Estimated dryland cropland values in the state rose between 3% and 4%, while the values of gravity- and center pivot-irrigated cropland rose 1% and 3%, respectively. However, the Northwest and Southwest districts saw declines between 2% and 5% for the two land classes.
Grazing land and hayland value estimates also rose between 2% and 5% over the last year, with slight declines in two districts. Major cow-calf pair regions, including the Northwest, North and Central districts, led the increase in market values, with growth between 6% and 8%.
Many cash rental rates in Nebraska were set prior to the economic shocks caused by COVID-19. The survey collection period for the Nebraska Farm Real Estate Report may partially reflect these rates and not account for possible adjustments. Landlords and tenants might consider amending contracts to account for these shocks or consider the use of alternative lease arrangements.
Conducted by the university’s Department of Agricultural Economics, the Nebraska Farm Real Estate Report is an annual survey of land professionals who include appraisers, farm and ranch managers, and agricultural bankers. Results from the survey are divided by land class and agricultural statistic districts. Land values and rental rates presented in the report are averages of survey participants’ responses by district. Actual land values and rental rates may vary depending upon the quality of the parcel and local market for an area.
A webinar covering the report’s findings will be held on July 16. Registration can be completed online.