Has the perfect storm created a buying opportunity for farmland in Wyoming?

“Farmland real estate got pretty doggone high for a variety of reasons, and we’re now seeing a good adjustment in prices,” says John Pearson, owner-broker of Pearson Real Estate in Buffalo, Wyo. “Farm prices in states like Nebraska have come down 20% to 25%, and we’re starting to see that in Wyoming.”

Pearson says there is a high correlation between commodity prices and farm prices.

“A lot of the corn, wheat and soybean farmers have had a pretty dang tough time at it. And other commodity prices have gone down, too, including cattle and hay. It’s been pretty much across the board,” he says. “Prices have stabilized a little, but they’ve stabilized at a much lower price. And those dropping prices finally caught up to the farm real estate market in Wyoming.”

But Pearson says that falling commodity prices were only the beginning.

“I don’t want to get political here, but the Obama administration had been pretty tough on the West, in general, and that brought a lot of uncertainty to the marketplace,” he says.

Less uncertainty
“There were people wanting to buy and sell ag lands in states like Wyoming, but there was a lot of uncertainty with public land issues, taxation and the uncertain direction the country was going, and that had a big influence on what people were doing in 2015 and 2016.”

He adds that last year’s presidential election added to the uneasiness.

“I think the election had a huge impetus on people just sitting on their hands with agricultural real estate,” Pearson says.

On top of all that, Wyoming and other energy-producing states took a huge economic hit when oil and gas prices plummeted.

“The energy sector has really, really taken it hard the last couple of years — and because of that, Wyoming and some other Western states have struggled, and that also has a lot of do with land prices and people buying,” Pearson says. “That darn sure comes into play — because for farmers who have mineral rights, they are no longer leasing those rights; and the royalty checks aren’t coming in like they used to, and other producers aren’t getting surface damage payments, so that hits people in states like Wyoming.”

So taking into account all those factors, Pearson says, “Some people have felt like they’ve been pretty beaten up, so it will take something to turn that around a little.”

Pearson is optimistic that things are turning around, which bodes well for both those wanting to buy and sell agricultural real estate.