Despite the dour mood in the agricultural sector, prices for good-quality farmland held steady in 2019, partly because less land than usual was on the market, said Farmers National Co., a farm management and real estate company. “There are a number of factors that indicate that the land market will continue to be steady in 2020,” said Randy Dickhut, senior vice president of real estate operations. At the same time, though, other factors could have a depressing influence on farmland values.
Low interest rates will continue to support land values, and the Trump administration’s trade war payments to farmers “will likely continue if Chinese trade issues are not fully resolved,” said Dickhut. “Overall, agriculture is in adequate financial shape.”
Factors that could weigh on land values include trade disruptions, said Farmers National. “There is concern if there will be an increase in financially caused sales of land by producers.” Last year, there was sufficient buyer interest to keep prices steady. “This would have to remain so for land values to continue on their plateau.”
Sam Kain, area sales manager for Iowa and Wisconsin, said good-quality cropland sells well while lower-quality land or dairy facilities draw less interest. Commodity prices are in a rut, and some operators are under stress. “We have been seeing more cautious buyers for several years, and now we are starting to see fewer buyers interested in making a land purchase,” said Kain.
Farmers National, which is based in Omaha, said it recorded a five-year high in acreage sold in 2019.