Farm Credit Services of America
Real Estate Trends
January 1, 2012
Benchmark Farm Value Trends:
Farm Credit Services of America monitors real estate value trends through semi-annual appraisals of sixty-six agricultural farms located throughout our Association. The Appraisal Team updates benchmark farm values based on recent real estate sales on January 1st and July 1st each year.
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): 14.8% 34.0% 113.2% 257.7%
Nebraska (20): 28.2% 43.4% 128.0% 225.7%
South Dakota (23): 10.0% 19.4% 84.8% 262.6%
Wyoming (2): 0.0% -1.1% 19.6% 105.6%
The real estate market has been active in South Dakota, Nebraska, and Iowa throughout 2011. There is strong demand for cropland across the Association resulting in strengthening values.
The six month benchmark farm trends indicate:
- All of the benchmark farm values in the state of Iowa increased over the past six months. The values increased from 1.3% to 29.9% with an average increase of 14.8%. Five of the twenty-one benchmark farms had values ranging from $10,000 to $12,900 per acre.
- Nebraska had three benchmark farms with values considered relatively stable. The remaining seventeen benchmark farm values increased from 10.2% to 78.3%. The six month average change was +28.2%.
- South Dakota’s benchmark farm value changes ranged from stable to +22.2% with an average change of +10.0%.
- Wyoming’s ranch and irrigated cropland benchmark values were considered stable.
Factors impacting the agricultural real estate market include:
- profitable cash grain and livestock 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.