Nebraska land values decline for third consecutive year
Panhandle Research and Extension Center, Scottsbluff
Jim Jansen, Extension Educator, Northeast R&E Center
The Nebraska Farm Real Estate Market Survey Results recently released by the University of Nebraska-Lincoln revealed Nebraska Panhandle agricultural land declined in value for the reporting year ending Feb. 1.
The average farmland value in the region is estimated to be $755 per acre, 8 percent lower than the prior year. This is the third consecutive year of market value decline.
The eight major types of land reported in the survey declined in value from 2016-17 across the state. In the Panhandle, gravity-irrigated and center-pivot-irrigated cropland saw the largest declines in value. These categories declined 13 percent and 14 percent, respectively. The survey revealed that the largest drivers of these declines were current commodity prices, property taxes and farm input costs.
Rental rates often lag behind land value trends. The survey showed the second year of rental rate declines. Dryland cropland and center-pivot-irrigated rates dropped 9 percent, while grazing land decreased 8 percent and gravity irrigated ground 4 percent.
The report also highlighted trends in agricultural land sales. In the Panhandle, the average tract size for a sale was 1,040 acres. Twenty-seven percent of sales were of dryland cropland, 2 percent irrigated cropland and 71 percent of sales pastureland.
Forty-five percent of land sales were made by estates. The remaining sales were a combination of active farmers (18 percent), quitting farmers (9 percent), non-local Nebraska residents (9 percent) and out-of-state residents (18 percent).
The Panhandle had the largest percentage of out-of-state land buyers at 36 percent. However, most land buyers in the region are active farmers or ranchers. It showed that 64 percent of farmland purchases were made in cash, while 36 percent were mortgage financed.