posted on June 01, 2016 05:55
The agricultural land market that has been relatively soft recently is not set for a major change this year. Reports from the Farmers National Company suggest that while values for high quality land holdings will be steadier; there will be a decline in valuation for lower quality land.
Despite these trends, the value of lands scattered across many regions will still be high when compared to their historic values.
The company’s statistics indicate that within the current market there will be those who will be interested in entering the market or expanding their portfolio.
In the Dakotas, there is a specifically high demand for high quality, tillable farmland, grassland and recreational property. Despite this, there is the question of whether or not the record-high grain prices that were experienced previously will be seen again. Because of this concern, those in South Dakota are only seeing the purchase of highly productive lands.
This has allowed for the land sale prices and cash rent prices for high quality lands to remain stable, especially land in East River South Dakota. The most preferred method to sell land, according to the report, is via public auction.
Land in North Dakota however declined by about 20% during the latter half of 2015.
Recreational land for hunting, which can be doubled for crops, is remaining in high demand. This has led to good prices in south-central South Dakota.
“This area is the pheasant hunting capital of the world, and many out-of-state land investors love to hunt pheasants,” Mohr, the area sales manager for the Farmers National Company said. “Land that was selling for $900 an acre six years ago, now sells for as high as $3,000 an acre.”
Mohr continued that out-of-state land investors are specifically seeking a minimum return before they invest. However, if the land is deemed good for pheasant hunting, they’ll usually accept lower returns.
Finally, the report states that South Dakota land can be worth up to $8,000 per acre whereas North Dakota can expect to be worth up to $6,000 per acre.
What is your land worth? Have you considered buying or selling any recently?
Let us know in the comments below.