June 8, 2012

Earlier this year UNL Ag Economist Bruce Johnson released highlights from the 2012 Nebraska Farm Real Estate Survey, confirming major increases in farmland values across the state.  This week Johnson released the full survey report, making it available on the UNL Department of Agricultural Economics Farm Real Estate website.  It text, table, and chart it reports land values reported in February 2012, land market transactions in 2011, and cash rental market conditions for 2012 and provides further information on what the numbers mean for today's producers.

See the Nebraska Farm Real Estate Market Highlights 2011-2012, by Bruce Johnson and Sara Van NewKirk, June 2012.

Report Highlights

The authors write:

• During the 12 months ending February 1, 2012 agricultural land values in Nebraska shot up, with the state, all-land average up 32%. This was the largest annual increase (in both dollars and percentage) over the 34-year history of the Nebraska land market survey series.
   
• The value gains reflect a market characterized by both spirited demand and very limited supplyof offerings for sale. In essence, it has been a scarcity-driven market as of late.
   
• The average value of center pivot irrigated land in the East District (pivot value not included in per-acre value) approached $8,000 per acre, the highest average value recorded. Center pivot land in the Northeast District also exceeded $7,000 per acre.
   
• Reflecting the great resource diversity across the state (land quality, water availability, climate, etc.) the per-acre values of land vary significantly. For example, center pivot land value averages
  range from less than $2,600 per acre in the Northwest District to nearly $7,950 per acre in the East District, with the highest quality irrigated land recently selling for more than $10,000 per
  acre. Dryland cropland values show an even greater spread of more than seven-fold from west to east. In addition, the relative mix of cropland and grazing land in the all-land configurations is extremely variable, such that district values show nearly a ten-fold variation from western  to eastern Nebraska.
   
• The reported dollar spread between low grade and high grade land is considerable, indicating that market participants are carefully considering differences from parcel to parcel regarding soil and water, general farmability, and other features that influence productivity and, ultimately, income potential.The observed value spreads between the low grade and high grade classes will often be 50% or higher for a particular land class and area of the state.