Serving America’s Landowners since 1929
For Immediate Release
Jan. 9, 2017
REGIONAL LAND VALUE REPORTS
Michigan, Ohio, Indiana, Illinois, Missouri, Kentucky, Tennessee, Arkansas, Mississippi
Top quality land values in this region have held steady, while medium quality land has trended
downward, said Roger Hayworth, ALC, area sales manager for Farmers National Company in
Lafayette, Ind. Low quality land, however, has been struggling in the marketplace with an
average 10 percent decline in value.
In fact, most states in the region are seeing high quality land values hold fairly steady. During
2016, more private transactions occurred, but approximately 60 percent of transactions still were
through auctions.
“If the property being offered lends to landowner reality, more than likely an auction will still be
our best opportunity, especially for a high quality farm in a buyer’s area,” Hayworth said.
More than 95 percent of auctions resulted in sales either the day of or during the week of the
auction. Hayworth said he’s seeing older landowners, estates and trusts fueling land sales, while
buyers routinely are local landowners.
“As we move into 2017, the eastern region has brought an interesting angle compared to other
parts of our marketing and selling area, which is a limited supply overall for most of 2016, while
there was an influx of offerings and auctions in the final quarter that sparked solid sales, as
higher quality land was still sought after by most buyers,” he said. “As we look into the near
future, there seems to only be a sprinkling of activity moving into 2017 at this time. I believe
with interest rates beginning to increase, the political movement completed and commodities
fluctuating at lower levels, cropland values will be remaining stable to slightly trending lower
during 2017.”
Kansas, Oklahoma
Land values in these two states haven’t changed much from mid-year 2016, reports Brock
Thurman, AFM, vice president and area sales manager based out of Kiowa, Kan.
“Top quality land is still holding the same values if in the right location,” he said.
Medium quality land has seen a slight decline of five percent, Thurman said, while poor quality
land has been difficult to sell.
“It could be down 50 percent from the top when it’s in poor condition and not in a good location.
Location is key,” he said.
Thurman said he doesn’t anticipate significant changes in land values for the first half of 2017 and
possibly beyond.
“High quality land will remain stable most likely due to investor money coming back into the
equation,” he said. “Medium quality land ought to remain steady for the same reason. Low quality
land will remain soft.”
Auctions remain the best method for moving medium- to high-quality land, Thurman said.
“We are using private and phone auctions on some tracts and it appears to be working well,” he
said.
Some privately sold land has been sitting on the market for extended periods of time, because it
was priced too high, Thurman said. So far, there have been only a few tracts that didn’t sell.
“Conversely, approximately 95 percent of public land auctions close the day of the auction or the
week of the auction,” he said.
The most active sellers to date have been absentee owners who were aiming for high value
peaks, but now simply want to sell before any perceived crash, Thurman said.
“We are seeing a new wave of interest from investors,” Thurman said. “Farmers are still buying
the ‘right’ farm if it is available, something next door or a good addition to a current operation.
Investors are looking at better values than the past three or four years.”
Texas
The number of ranches for sale in the state is a bit lower than it was six months to a year ago, but
there is a steady stream of east Texas timber properties on the market, said Dan Hatfield, ALC,
Texas broker, with Farmers National Company in Fort Worth, Texas.
Values for farm and ranch land have remained steady, though. Investors and estate sales are
generating the most properties for sale on the market, but interest in buying ranches has been
down a bit.
“Interest in timber properties has been good. Investors are the biggest buyers of timberland,”
Hatfield said. “Local farmers and ranchers, along with investors, are the biggest buyers of nontimber land.”
Iowa
The second half of 2016 saw a jump in land auctions in the state of Iowa with a $34.859 million
greater volume in the second half of the year and 3,763 more acres sold, said Sam Kain, ALC,
GRI, ABRM, national sales manager for Farmers National Company based out of West Des
Moines, Iowa. Auctions are the most successful approach to selling land in Iowa, with 97 percent
of auctions resulting in a sale the day of the event.
Top quality land remains stable with a possible five percent decrease. Medium quality land is
experiencing a five percent decrease and low quality land is seeing a 10 percent decrease in
value. Pasture ground remains stable. Kain said he is seeing some land sales resulting from
farmers experiencing financial pressures. Approximately 85 percent of buyers are local farmers
and 15 percent are investors.
“The land market has been stronger since harvest was completed, which I attribute to above
average yields,” Kain said. “For 2017, a lot will depend upon how much land comes on the
market. Current commodity prices indicate land values should be trending downward, but if we
continue to see so few farms come on the market, prices will stay steady.”
Nebraska
Land values for the first half of 2017 in Nebraska likely will remain relatively flat unless there is
an uptick in grain and livestock commodity prices, said JD Maxson, assistant area sales manager
for Farmers National Company in North Platte, Neb. Overall, the land market has softened due to
weak grain and livestock commodity markets. But, Maxson anticipates high quality land in
sought-after locations to continue to be in demand in the first half of the year.
“A farm with Class I and II soils, good access, water and a level to gently rolling topography has
and will continue to get the attention of local neighboring farms and investors,” Maxson said.
“Typically, this type of farm offers high yields and excellent productivity, which translates to
bottom line profits and above average return-on-investment. In comparison, an average to
medium quality farm with any tract needing improvements such as gravity irrigation to pivot,
which is a combination farm with Class III and above soils and may need cedar tree removal, is
being discounted by as much as 25 to 30 percent.”
Maxson also said inflation could be on the horizon with the recent one-fourth of a percent hike in
interest rates.
“However, land is a hard asset and can be leveraged against inflation versus other paper
investments,” he said.
Still, since August 2016, top quality land in Nebraska continues to hold its value, while medium
and low quality land is trending lower. Hard grass and meadow acres, as well as soft grazing
acres, also are trending lower.
High quality farms are selling best through the auction process and sell within days if priced for
the market, while medium and low quality farms are moving better with private treaties, but sit
on the marketplace for longer periods of time. Almost all auctions have been successful in this
state from June 2016 forward.
Unfortunately, Maxson has seen a few forced sales due to farmers’ financial constraints.
“However, lenders have been meeting with the producers after harvest. We certainly could see an
80-acre farm or short-quarter come on the market to generate operating capital for 2017,” he
said.
Active sellers include absentee land owners, farmers/owner-operators and trusts. In the last few
months, buyers have been investors.
“1031 money has had a huge impact in the last 90 days,” Maxson said. “High quality farms are
holding value, while medium and low quality farms with issues like access, soil and water, along
with a low percentage of tillable acres or land that needs improvements, are taking a hit of 25 to
35 percent.”
North Dakota, South Dakota, Minnesota
Sales volumes and the number of units sold in the Northern Plains region have held stable in the
past six months, said Brian Mohr, area sales manager for Farmers National Company in
Garretson, S.D.
“With the biggest drops behind us, I look for only a five to 10 percent decline in land values in
the Northern Plains this year,” he said.
Medium and poor quality ground is down again this year by approximately five percent. Top
quality land is experiencing a bigger drop this year, as much as 20 percent at recently held
auctions.
In North Dakota and Minnesota, private listings and sealed bid auctions are working best, while
public auctions are most successful in South Dakota. Most private listings sit on the market no
more than three months, though and upwards of 90 percent of all auctions result in a transaction,
Mohr said. Half of all auctions sell the day of, with the remainder coming to fruition that same
week.
“All of the good land sells,” he said.
The most active sellers in this region are retiring farmers and family trusts. In turn, the majority
of buyers are farmers looking to expand their operations.
Washington, Idaho
Land values for top quality and medium quality land have remained steady in the past six
months, helping fuel the market in this region. Flo Sayre, ALC-A, Farmers National Company
real estate broker for the state of Washington, said sales interest remains strong and volume is
equal to slightly better than it was six to 12 months ago.
Private listings are working best in these two states with property being listed anywhere from
just 10 to 180 days, depending upon the type of land. Sellers include farm operators, estate sales
and investors.
“Investors are important in the land market in Washington and Idaho,” Sayre said.