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Pasture values seem to be slipping

Pasture values seem to be slipping
It's hard to track pasture values during the year, but here are a few reports that might help.

 

It's hard to get a feel for pasture pricing changes, although farmland pricing and rental rates are regularly reported through every calendar year.

Still, a few reports came out in early 2016 and a couple more from late 2015.

The latest Farmer's National Company 2016 Regional Land Reports, just released this week, suggest softening in pasture land pricing, which has risen considerably in recent years, but not at the meteoric rise farm ground experienced.

JD Maxson, assistant area sales manager for Nebraska, was one of the only Farmer's National staff members in the report who actually talked about pasture rental or sales pricing.

He said, "Livestock producers, cow/calf and cattle on feed, have experienced a sharp decline in bottom-line profitability, which has a direct impact on pastureland/grazing acres. With cattle numbers up, one would automatically expect additional pressure on grazing acres; however short-line profits have seemingly depressed the pastureland market.

"Purchasing additional grazing acres, while realizing lower profits at market time, has had a direct reflection on prices paid per acre. Buyers are more cautious and have been forced to be more selective with their long-term farmland investments."

Brock Thurman, area vice president for Kansas and Oklahoma, had only this to say: "The recreational properties have to be exceptional to bring the strong prices. Medium quality will not bring the values seen three to four ago," Thurman said.  

However, a North Dakota survey in March of this year showed higher pasture rents in 2016, as well as higher estimated land values, compared with the average of the last five years. The same survey from 2015 also showed increases in most locations over the previous five-year average.

The Iowa State University's Farmland Value Survey in April 2016 showed pasture price virtually the same, with a statewide average of $2,743, versus the statewide average of $2,796 in September 2015.

The most recent data from Kansas shows a mixed bag of decreases and increases in 2015 compared with 2010. The statewide average for native pasture in 2015 was $19.06, while introduced or "tame" pasture has a statewide average of $22.38. Like other Great Plains states, Kansas has tremendous rainfall differences from west to east and therefore tremendous differences in pasture productivity and carrying capacity.

Perhaps one of the best-known rental rates in Kansas is from the Flint Hills, the famous native tallgrass prairie that angles across the southeast portion of the state. This area averages 40-45 inches of rainfall per year. Pasture rental rates in 2015 there were $28.87 per acre for full-summer grazing, $49.38 per acre for partial-summer grazing at heavy stocking rates, and $21.75 per acre for full-year grazing.

The University of Nebraska's land value survey in February 2016 shows pastureland in recent months holding better prices than farmland, but generally slipping. Pasture called non-tillable grazing land posted a statewide average of $980 per acre, or 2% less than in the survey in February 2015. Pasture categorized as tillable grazing land was ranked at $ 1,550 per acre, which was a 2% increase from the previous annual survey. Hay land was valued at a statewide average of $1,945, which was a 17% decrease from the previous year's measure.

Finally, a report from Mississippi State University says pasture values in that deep-south state haven't changed much in recent years, when all is counted.

"For the most part, grazing land has reverted back to the price level and rental rate paid before the cattle price explosion in 2014," the authors wrote. "Heading into next year, while there still may be significant downward movement in pastureland rental rates, it is unlikely that pastureland sales values will fall much farther.

"As far back as 2012–13, grazing land averaged around $2,000 per acre statewide in Mississippi. With a 2016 average pastureland value of $1,923 per acre, it is likely that Mississippi rangeland has found the bottom. Cash rents for pastureland, however, would still need to come off approximately $10 per acre to align with the average rate seen before the beef cattle market spike."

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