Farm Progress

Preliminary Farm Real Estate Market Survey shows average Nebraska ag land values declined 3% over last year.

Tyler Harris, Editor

March 23, 2018

3 Min Read
GOING DOWN: Since reaching a high of $3,315 in 2014, average market values have dropped 17%, the report shows.

The average value of Nebraska agricultural land has declined by 3% over the last year, according to preliminary findings from the University of Nebraska-Lincoln Farm Real Estate Market Survey. This marks the fourth-consecutive year of decline. Since reaching a high of $3,315 in 2014, average market values have dropped 17%, the report shows.

The statewide all-land average value for the year ending Feb. 1 averaged $2,745 per acre. Average farmland values for the eight districts and the percentage decrease from 2017 were $720 per acre in the northwest (a 5% decrease); $1,095 per acre in the north (a 6% decrease); $5,420 in the northeast (a 2% decrease); $3,280 in central Nebraska (a 3% decrease); $6,260 in the east (a 2% decrease); $1,700 in the southwest (a 3% decrease); $3,775 in the south (a 3% drop); and $4,810 in the southeast (a 1% decrease).


Survey participants cited low commodity prices over the prior year and current property tax policies as the reason for declining farm real estate values.

“We're facing another year of lower expectations for commodity prices, piled on to several years of depressed commodity prices, coupled with two other factors,” says Jim Jansen, ag economist with Nebraska Extension and one of the authors of the survey. “One of the primary land ownership expenses noted by survey panel members is property taxes. That's a challenge faced by landowners regardless of whether they own the land and farm it, or are renting the land out and are trying to recover any kind of return on the land.

“If you own the land and farm it, or if you're a tenant and farm it, input costs are also a factor contributing to very tight margins. And that's also influencing the willingness of those in the real estate market to purchase land,” Jansen says.

Values for dryland and irrigated cropland across Nebraska saw decreases of 1% to 7%.

Land classes serving the cow-calf sector, including grazing land and hayland, saw a declines ranging from 1% to 10%. According to survey participants, demand for beef and availability of forage during drought were two major drivers for the future value of these land classes.

Tillable grazing land values declined by 6% — the largest percentage decline of the seven land classes. Sharp drops in the northeast (11%) and central (10%) districts contributed to the overall reduction in tillable grazing land values. Hayland in the central and southwest districts also experienced 10% declines in value.

However, land values did see a slight uptick in a few cases, including dryland cropland without irrigation potential in the northeast region, and center pivot-irrigated cropland in the central and southwest parts of the state.

Meanwhile, tillable grazing land saw an increase in value in the south and southeast regions, and non-tillable grazing land saw an increase in the southeast part of the state, while hayland saw an increase in the east.

Jansen says it's hard to pinpoint why these particular land-use types and regions saw an increase. A number of factors influence value, and the slight uptick in these locations are likely due to market drivers unique to the region.

While this is the fourth consecutive year of decline, Jansen says values have moderated compared to previous years; the 3% drop this year is less than the 9% decline reported in 2017.

“My opinion is we're going to need to see another major economic force, whatever that may be, to see a major change in land values increasing or decreasing,” Jansen says. “Three big factors to watch in 2018 are expectation for commodity prices, input expenses — whether input supplies, land ownership expenses or property taxes — and long-term interest rates for land purchases.”

The preliminary report can be found 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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