The University of Nebraska’s annual Farm Real Estate Survey says the average value of farmland in the state fell by 10 percent in the past year, to $2,805 an acre. It was the third year of declines since land peaked at an average of $3,315 an acre, an overall drop of 15 percent.
The biggest declines since February 2016 were in dryland cropland that has irrigation potential, down 13 percent, and in tillable grazing land, down 12 percent. “During periods of higher commodity prices, producers gain the economic incentive to develop these land classes to produce higher yields through irrigation or production of crops,” said a university news release. Commodity prices are in a slump with little improvement expected, so there is less interest in those types of land.
All classes of land posted declines in the Nebraska survey. The smallest was a 6 percent decline in the value of gravity irrigated cropland, to an average $6,120 an acre. Land rental rates also are down. Property taxes are rising at the same time farmland values are declining. “Negotiating an equitable rental rate remains a challenge for landlords and tenants,” said the university.