According to the Farmers National Company, a ten-year run-up in land prices appears to be leveling off. Farmers National is one of the nation’s top ag real estate companies, and they say average values of crop ground and grasslands have dropped from the historic highs of recent years, but they’re still very strong. The supply of land for sale mirrors the amount of demand to buy land, so the market is in “equilibrium.” The supply of land for sale is lower as some farmers are deciding whether or not to keep their land, and buyer demand has trended lower, too. With farm and ranch profits lower, lenders are also being more cautious about what they will lend for land purchases. Investor interest in farm and ranch land also declined as prices got higher and return on investments went lower.
As land prices begin to fall, investors and fund buyers are moving back into the market. Farmers National says overall demand for good land is solid, but not so much on lower quality farm ground and grasslands everywhere.
Source: NAFB News Service