News

Continued decline in farmland values

Farm Credit Services of America reports a continued decline in farmland values for the first half of 2016 in its five state territory.

Chief Risk Officer Mark Jensen says a three year trend of lower farm revenues has put downward pressure on real estate in Iowa, Nebraska, South Dakota, Wyoming and Kansas.

“Commodity prices took a pretty hard landing over a one-and-a-half year period (with corn prices) over a $6 dollar average into the $4 dollar range, and now just below that.  Real estate values have had more of a ratcheting effect, and maybe you could say more of a soft landing at this point.”

Farmland values have declined 20 percent in Iowa, 12 ½ percent in Nebraska and just under five percent in South Dakota since 2013.

Jensen says demand for farmland varies considerably.

“We have some producers that are selling some real estate; it’s still pretty minimal and not widespread at all at this point.  But you still have a churn in the market.  There’s going to be a certain amount of ground that’s going to be sold just because of family transitions and just the overall dynamics that you typically see in the market.”

FCS America data shows public land auctions across its five states are down eight percent compared to a year ago.