News

Farmland market parallels between now and 10 years ago

An extension ag economist looking at farmland values sees a lot of parallels between now and a decade ago when the market soared to new records.

Jim Jansen with the University of Nebraska-Lincoln tells Brownfield high commodity prices and low interest rates were drivers in 2012 and are driving land prices again.

“Also there’s been a little bit more of a push, or a little bit more of a concern on how to deal with inflation. One strategy (of) farmers, people in town, whoever might (want) to buy intangible assets, so they’re looking at land to store wealth. If you don’t know what’s going to happen, land is one place where you can store wealth.”

He says similarly to 10 years ago, fundamentals like farm profitability and the cost of borrowing will dictate where the farm market goes from here.

“So if you are an operator and have long-term debt right now that’s not at a very appealing interest rate, this is the time to refinance that and get that into a mode that’s a little bit more competitive for what you’re looking for.”

In Nebraska, the value of farmland has surged 16 percent in the last year to a new record average of $3,360 per-acre.