NE farm land rockets 31% higher
Just when you think farm land values can't increase at a steeper clip, more numbers come along to blow off the top.
That's happened again this week, this time in Nebraska. The latest survey of farm land values there, the results of which were released this week, show land's shot higher by the largest margin in the more than 3 decades values have been formally monitored.
Overall, farm land values have surged 31% in the last year in Nebraska, a number that "confirms what most people close to agriculture already knew -- agricultural land values across the state have shot upward in recent months," says University of Nebraska (UNL) ag economist Bruce Johnson, who conducts the annual land values survey for his state. As of February 1, farm land is worth $2,410 per acre.
Value gains ranged from 23% over 2011 in the northwest part of the state ($642/acre) to $4,293/acre in the southeastern part of the state, which amounts to a 36% increase.
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"Clearly, a booming cash-grain economy in 2011 translated into spirited bidding for cropland," Johnson says. "And, at the same time that demand was robust, the amount of land for sale in any given local area was generally minimal."
A couple of variables continue to affect land values in Nebraska differently than most states, Johnson says. First, there's a lot of grazing land that, while it grew in value, it did so at a slower clip than crop ground. But, a lot of that grassland can and may be moved back into crop production. And, that could make it a lot more valuable awfully quickly, Johnson says.
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"Grazing land classes showed more modest value gains for the year, but overall for the state still showed a 19% increase for non-tillable grazing land," according to a UNL Extension report. "The tillable grazing land class, which is land considered to be potentially converted to cropland, recorded significantly higher values and larger higher percentage value gains in those areas where there are no moratoriums precluding further irrigation expansion."