Overall average values of crop ground and grasslands have slipped from the highs of several years ago, but are still historically strong, according to Farmers National Company, a farm and ranch real estate company.

Randy Dickhut, Farmers National senior vice president of real estate operations, said ag land acreage for sale is on the low side of normal as some landowners consider whether or not to sell now. Demand to buy land has trended lower over the past few years as buyers are being more cautious, he added.

National supply, demand for farm land down

According to a survey of company agents, farmers and ranchers, who were the predominant purchasers of land that came on the market during the past decade, are not as aggressive now as compared to recent years. Plus, investor interest in farm and ranch land declined as land values moved higher over the last four to five years. However, individual and fund investors are moving back into the land market as land prices soften.

“With the supply of land for sale being on the low side, the land market is stable at this time. But factors affecting land values can surface over the next few years to move the land market in either direction,” Dickhut said. For example, if acreage available for sale increases due to lower crop and livestock profits, or landowners decide to sell now for various reasons, the land market equilibrium could change, pressuring land prices lower, he said.

In the Northern Plains, Farmers National reported that land values for high quality land declined from June 2015 to June 2016 by $400 per acre average in North Dakota, by $100 per acre average in South Dakota and by $900 average by acre in Minnesota.

Minnesota’s higher average land price decline was a reflection of market adjustment.

“The best and highest priced Minnesota land is in the southern region, near the Iowa border. Those prices had gotten significantly higher than the north. Now those buyers are more cautious and the prices have fallen further, although the auctions in that area are well attended,” said Brian Mohr, Farmers National area sales manager based in Garretson, S.D.

Minnesota auctions east of Fargo in the Red River Valley are well attended and the land is still in high demand, he added. Southern Minnesota land buyers are not as anxious to add acres. Land sales in southern Minnesota have ranged between $5,000 and $8,000, down slightly from last year.

The central portion of western Minnesota sees land values down from their high point, but interest remains strong and top quality land has sold well at auction, Mohr said. A recent sale of 2,000 acres set values at more than $4,100.

Looking ahead through 2017, Mohr predicted that Minnesota land prices will continue be flat or slightly lower, although recent crop price bumps should improve the outlook slightly.

In North Dakota, land prices continue to slide off their peak, Mohr said. Prices in the Red River Valley range from $4,000 to $5,000 per acre for high-quality land. That’s down 15% to 20% from 2014-2015. Prices for marginal land outside the area have seen steeper declines of 20% to 35%. Prices have ranged from $1,500 to $2,500 for poorer quality land.

Land values for top quality land in the southeast portion of South Dakota remained stable from 2015 until now, Mohr said. Even recent auctions for land in this state have shown a slight increase. Prices up to $10,000 per acre have been the norm at well-attended public auctions. However, as you move west, Mohr said, prices drop significantly once you get past the Missouri River pheasant belt.