Interest in buying Kansas agricultural land has grown since a pandemic-induced slowdown in the land market last spring, according to representatives from Farmers National Co.

Farmers are feeling more financially secure as very strong commodity prices arrived on top of large government payments in 2020. This is propelling farmers to bid more aggressively for additional land than has been the case during the past six years, according to Farmers National Co.

Individual investors, both first-time and experienced buyers, are stepping into the land market as they search for a safe, long-term real estate investment in an environment of low interest rates. Investor-buyers seldom outbid farmers for a good farm unless they have 1031 tax-deferred exchange funds to spend in a short period. The increase in ag land prices is happening in most areas of the Grain Belt, and with most types of land.

"At Farmers National Co. auctions, we are seeing competitive bidding push prices for good cropland to levels approaching 2014 values," says Randy Dickhut, Farmers National Co. vice president of real estate. "Average- to lower-quality farms are experiencing stronger sales prices, too, while pastureland increases are more modest."

Currently, the demand for good farmland is outstripping the supply of farms for sale. During the previous few years, the number of farms for sale has been lower, but there remained enough demand in the farmland market to balance the lower supply — resulting in steady land prices. At this time, the strong demand to own farmland is one of the main factors pushing prices higher. "In order for the seller to get top dollar in the current land market, they have to ensure there is true competitive bidding," Dickhut says.

Higher land values will bring more sellers into the market as estates, trusts, recent inheritors and family groups evaluate whether to sell the farm or ranch and capture the higher prices. An additional consideration is the uncertainty surrounding future tax policies, which may trigger a sale sooner rather than later for some.

The land market will be balancing increased demand for good cropland against what might be an increasing supply of farms for sale.

Gray County

About 309 acres of Gray County land was sold at auction in a deal that closed May 20. The farmland, southeast of Ingalls, sold in one tract. It was well-sited for livestock grazing, alfalfa and grain production. The property sold for $355,350. The sellers were Darren McElfresh and Brian P. McElfresh, trustees of the Karen Rixon McElfresh Separate Property Trust. Farmers National Co. handled the sale.

Finney County

About 476 acres of Finney County Conservation Reserve Program land was sold in three tracts on auction May 19. Tract 1 and 2 were 160 acres each, and Tract 3 was 156 acres. The farms had been in CRP for many years, with the current contracts expiring in September 2026. The farm is enrolled in a hunting access and conservation habitat contract in connection with the current CRP program. The three tracts offered excellent pheasant and deer hunting. Tract 1 sold for $2,100 per acre, Tract 2 sold for $2,250 per acre and Tract 3 sold for $2,000 per acre. The seller was the Garland and Ruth Phipps family. Farm & Ranch Realty Inc., Colby, handled the sale.

Graham County

About 320 acres of Graham County productive farm ground, pasture and CRP land were sold in one tract at auction June 17. The land included CRP acres that are enrolled until 2025, as well as native grasses for grazing and a pond toward the north end of the pasture. A new water well was drilled in February. The property sold for $1,000 per acre. The sellers were Brown Living Trust. Farmland Auction & Realty Company Inc., Hays, handled the sale.