Rural Issue

Prices steady for good quality land

Location and quality continue to be the main drivers of farmland prices.

Randy Dickhut, vice president of real estate operations with Omaha-based Farmers National Company, says lower grade land has seen drops in value near 15 percent from recent highs. But he says top quality crop and grazing land still brings solid prices.

“We have areas in our 24-state coverage area that, due to competitiveness of the location and the local buyers and a maybe a few investors, and if it’s good quality cropland or good quality pasture, it’s bringing, we’ll say, steady prices—good prices—in comparison to the last few years,” Dickhut says.

Dickhut says commodity prices will be the main factor in the future direction of land prices.

“That’s a big factor—and we’ll watch how China’s economy is going, because that’s a big contributor to exports for our grain markets,” he says.

The other factor that could impact land values in 2015 is the potential for rising interest rates.

“I think the feeling right now is that interest rates will begin to rise a little more this year, but nobody is expecting any big or fast moves,” Dickhut says. “So if it’s gradual and slow, then I think the effect on farmland will be slow, too.”

Dickhut adds that auction activity for land sales continues to slow, with more transactions going to private listings.

AUDIO: Randy Dickhut