Farm Credit Services of America (FCSAmerica) monitors real estate value trends through semi-annual appraisals of sixty-six agricultural farms located throughout the four states we serve. The Appraisal Team updates benchmark farm values based on recent real estate sales on January 1st and July 1st each year.
The following data is as of July 1, 2011:
The average change in benchmark farm values is shown below. The number of benchmark farms is shown in parenthesis after each state.
State Six Month One Year Five Year Ten Year
Iowa (21): 17.0% 36.1% 101.4% 215.4%
Nebraska (20): 12.4% 23.4% 87.3% 159.5%
South Dakota (23): 8.5% 13.9% 75.5% 242.4%
Wyoming (2): -1.1% -2.7% 23.4% N/A
The real estate market has been active in South Dakota, Nebraska, and Iowa in late 2010 and early 2011. There is strong demand for cropland within our chartered territory.
The six month benchmark farm trends indicate:
- Iowa’s benchmark farm values increased from 5.5% to 46.4% with an average increase of 17.0%.
- Nebraska’s benchmark farm value changes ranged from stable to +38.5% with an average change of +12.4%.
- South Dakota’s benchmark value changes ranged from -18.5% to +34.4% with an average change of +8.5%. The Belle Fourche benchmark in western South Dakota decreased 18.5% due to a softer rural residential market. The remaining benchmark farms value changes ranged from stable to +34.4%.
- Wyoming’s ranch benchmark decreased 2.2% with the irrigated benchmark considered stable.
Factors impacting the agricultural real estate market include:
- profitable cash grain production,
- strong demand for cropland tracts,
- relatively low interest rates, and
- a lack of alternative investments from both the buyer’s and seller’s perspectives.