Farm Progress

For the first time in at least 25 years, ag land valuations as a whole in Nebraska declined by 0.15% from 2016 to 2017.

Tyler Harris, Editor

May 31, 2017

2 Min Read
ON THE DECLINE: The Nebraska Department of Revenue Property Assessment Division found that ag land valuations declined from 2016 to this year. Property valuations are calculated from the last three years of land sales.

The Nebraska Department of Revenue recently released its preliminary analysis of 2016 to 2017 property valuations, showing ag land valuations declined 0.15% from 2016 to 2017. It's the first time in at least 25 years that ag land valuations have declined.

Jay Rempe, senior economist with Nebraska Farm Bureau's Government Relations Department, notes the slight decline comes after significant increases in property valuations in the last 10 years. Over the past 10 years, the aggregate value of ag land statewide has increased 253% in Nebraska.

Valuations are made based on three years' worth of land sales, so there may have been declines in average land values in the last 25 years that were not reflected in valuations.

"Starting in 2006 to 2007, we saw quite a run-up in land values. It turned in 2013 and 2014, just like farm income did and commodity prices did," Rempe says. "We have seen three years in a row now of value declines in land markets, so the average is finally catching up with it. That's why we're seeing the slight decline now."

The decline will likely provide some welcome relief for producers dealing with a heavy property tax burden. However, certain counties saw a bigger benefit than others, Rempe notes.

"In certain localities, it should be beneficial. Particularly in Sarpy County in eastern Nebraska; their values were down overall about 10% from 2016 to 2017. They're such a small portion of the overall valuation base in that county, they should see reduction in taxes," he says. "Other counties where agriculture and other property value sectors are fairly even, they may not see such a benefit. It might put the pause on property tax increases for a year, but we'll have to see."

However, other counties, most notably those in the Sandhills, saw an increase in land valuations. For example, McPherson County saw a 18.68% increase, and Hooker County saw a 19.28% increase. These increases are largely tied to the predominant commodity raised in these counties — beef.

"What we saw is the runup in cattle prices going into 2015, so it's because we use that three years' worth of sales you still have some pretty high-priced sales in setting in those tax values," Rempe says. "Hopefully, maybe over the next year or two, we should start to see that moderate as well."

The preliminary analysis shows statewide property valuations increased 3.34%, resulting in an increase in valuations of approximately $7.34 billion.

View the property assessment report online.  

 

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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