Area ag land values fall

OMAHA, Neb – A steady but gradual decline in farmland values continued into the first half of 2016 across the states served by Farm Credit Services of America.

Iowa has experienced the greatest decline in average farm values – about 20 percent since the market’s 2013 peak. Nebraska and South Dakota farmland has declined by a more modest 12.5 and 4.8 percent respectively during the same period.

Demand for farmland also is down. Public land auctions declined 8 percent in the first six months of 2016 compared to the previous year. This percentage includes public auctions in Iowa, Nebraska, South Dakota and Wyoming, as well as Kansas, where FCSAmerica works in alliance with Frontier Farm Credit to monitor farmland values.

Across the five states, lower farm incomes and per-acre profitability continue to put downward pressure on farmland values. Unlike last year, when a strong livestock market led to increased demand for pastureland, values on both pasture and cropland are generally down in 2016. This reflects lower commodity prices for grain as well as cattle.

The fall in commodity prices has outpaced the rate of decline in farmland values and FCSAmerica continues to forecast a soft landing for agriculture as the current market correction brings supply and demand back in line.

While three benchmark farms increased in value in South Dakota, eight lost value. As a percent of total sales, public auctions have grown significantly, increasing 65 percent from a year ago.