Area ag land selling for less
FAIRMONT — What is the value of ag land? Is it a good time to sell? Is it a good time to buy?
These are legitimate questions, but unfortunately, there are no definitive answers.
Now could be a good time to sell. Currently, there is less quality farm land for sale than normal, according to Farmers National Company, an Omaha-based agricultural landowner services firm that sold almost 3,900 properties in the last five years. An average of 1 percent of ag land sells each year, but in Iowa in 2017, about two-thirds of 1 percent of ag land sold in the open market.
Having the opportunity to acquire neighboring farmland could be an impetus to a buyer, but factors such as interest rates and land quality also come into play.
On the other hand, selling land in the current market might be a good move. Ag land values remain strong even though they have dropped from previous years.
Mike Sheplee, Martin County deputy assessor and senior appraiser, is reluctant to list high and low land prices, referring to them as outliers that might not represent market conditions, but he does say overall ag land prices have decreased.
“Prices of good quality ag land with a crop production index (CPI) of 86 or better have declined about 10 percent from last year,” Sheplee said. “Last year’s median was $7,950 per acre compared to $7,100 so far in 2018.”
The 14 land sales in Martin County in 2017 were concentrated in eight townships. So far this year, 14 sales were spread out over 11 townships, and the average sale was about 10 percent less than the previous year. Of the tilled land in the county, 78 percent is rated 86 or better CPI.
“Nearly all buyers continue to be farmer owners who are expanding their operations or acquiring land previously leased when landlords decide to sell,” Sheplee said.
But not all rural land sold in Martin County have been used for agricultural purposes.
“We’re also seeing sales of conservation-type lands between private individuals,” Sheplee said. “These are lands with expiring CRP (Conservation Reserve Program) contracts which remain in the permanent CREP/RIM (Conservation Reserve Enhancement Program/Reinvest in Minnesota) programs. Since CRP program maintenance payments have expired after 15 years, they have been selling in the $650 to $1,400 per acre range.”
For more information on ag land sales, detailed data is available at no charge at the Martin County Assessor’s Office, and additional information is available at www.beacon.schneidercorp.com. There also is a new free Beacon functionality on the parcel page sales section to link you directly to the eCRV (electronic certification of value) that is required for each sale, Sheplee said. The eCRV provides specifics of each sale transaction such as buyers, sellers and transaction terms.