Farm Progress

With many farmers' operating expenses tied up, few are showing interest in buying land.

Tyler Harris, Editor

July 27, 2017

2 Min Read
LACK OF CONFIDENCE: Broker Ron Stock notes the price of land is closely tied with the buyer's confidence. With tight margins and operating expenses tied up in other investments and inputs, the confidence of many potential land buyers has dwindled over the last year.

Late summer is typically a time when land sales start to slow down. However, Ron Stock, Co-Owner and CEO at Stock Realty & Auction Co. notes this summer, land sales have seen a decline over last summer.

"The typical land market when it was robust three years ago, there were people listing land year-round because it was selling year-round. Now it's very stagnant," says Stock.

A small amount of farmers are being asked to sell some land in order to sustain their operating line of credit. "Some are taking it to auction and getting it behind them," Stock adds. "Some feel they want to sell before this fall, when more land will likely come to market and potentially drives the price down. Some are selling now because they're afraid commodity prices might stay low or drop even lower after a big harvest."

Marketing time to sell a farm has increased to over 90 days, and although it's fair to say the price of land has consistently backed off a solid 10% in eastern Nebraska, greater than 10% in central Nebraska and 20% or more in western Nebraska since the highs of 2012, a lack of land sales is possibly keeping land from dropping drastically.

A big difference over previous years is that now, many farmers are not able to take money out of their operating notes and using it to buy real estate.

"Looking forward, to say land is holding steady or going up or down, there are too few of sales to let us know what's going on right now," says Stock. "Now everybody is watching their operating expenses so closely, it's up against the limit and they don't want to write a check out of their operating account for a new farm."

Of course, it all depends on perspective. After an increase in the land market over a six-month period in 2013, it may seem like prices have declined further than they have without accounting for land values before and after those six months.

"The price of ground is directly related to the confidence of the buyer. Right now the buyer's confidence has been shaken," Stock adds. "In 2013 to 2014, the confidence level was high and farmers were aggressive. For about a year, the confidence level has been dwindling. That confidence is all tied to the price of grain, ground etc."

Ron Stock contributed to this report.

Ron Stock is a licensed real estate broker and has been in business with his brother, Mark for 32 years. He is licensed in Nebraska, Kansas, Oklahoma, Colorado, South Dakota, Iowa, Minnesota, and Missouri. He can be reached at 402-649-3705.

About the Author(s)

Tyler Harris

Editor, Wallaces Farmer

Tyler Harris is the editor for Wallaces Farmer. He started at Farm Progress as a field editor, covering Missouri, Kansas and Iowa. Before joining Farm Progress, Tyler got his feet wet covering agriculture and rural issues while attending the University of Iowa, taking any chance he could to get outside the city limits and get on to the farm. This included working for Kalona News, south of Iowa City in the town of Kalona, followed by an internship at Wallaces Farmer in Des Moines after graduation.

Coming from a farm family in southwest Iowa, Tyler is largely interested in how issues impact people at the producer level. True to the reason he started reporting, he loves getting out of town and meeting with producers on the farm, which also gives him a firsthand look at how agriculture and urban interact.

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