The value of agricultural land in Nebraska increased by an average of 16% over the prior year, to a statewide average of $3,360 per acre, according to the preliminary findings of the 2022 Nebraska Farm Real Estate Market Survey. This marks the largest increase in the market value of agricultural land in the state since 2014, and is the highest non-inflation-adjusted statewide land value in the history of the survey.

According to the survey, higher commodity prices and interest rates near historic lows have contributed to the recent robust real estate sales market. Survey participants also reported that those purchasing land looked to the asset as a hedge against inflation and economic uncertainty.

“Many operations improved their financial positions in the last year, despite rising machinery costs and input expenses,” says Jim Jansen, an agricultural economist with Nebraska Extension who co-authored the survey and report with Jeffrey Stokes, a professor in the University of Nebraska-Lincoln’s Department of Agricultural Economics.

Pending concerns

Jansen notes that the outlook for 2022 appears favorable, as commodity prices continue to rise, but cautions against rising input expenses and concerns about drought across Nebraska.

Statewide, the preliminary report found that estimated values of center-pivot-irrigated cropland rose by about 17%. Dryland cropland values rose between 15% and 19%. Grazing land and hayland market values range from about 10% to 13% higher than the prior year.

Survey results also revealed that cash rental rates for dryland and irrigated cropland trended up, averaging 10% to 15% higher. Survey participants indicated crop prices as the major factor contributing to the increase in rental rates.

Grazing land and cow-calf pair rental rates trended steady to higher, with average statewide rates increasing 6% to 8% over the prior year.

The Nebraska Farm Real Estate Market Survey is an annual survey of land professionals, including appraisers, farm and ranch managers, and agricultural bankers. It is conducted by the UNL Center for Agricultural Profitability, based in the Department of Agricultural Economics. Results from the survey are divided by land class and agricultural statistic district.

Land values and rental rates presented in the report are averages of survey participants’ responses by district. Actual land values and rental rates may vary depending on the quality of the parcel and local market for an area. Preliminary land values and rental rates are subject to change as additional surveys are returned, and the final report is compiled and released in June. Learn more at the UNL Center for Agricultural Profitability website. 

Due to the inherent limitations of this survey, the information in this report should not be used to set a specific rental rate or value a particular parcel of real property for sale or property taxes, security for a loan, and other related legal matters.

Evans is a Nebraska Extension agriculture economics communications specialist. This article was compiled in part from UNL CropWatch news releases.