Agricultural Economics Department
Date of this Version
6-2013
Document Type
Article
Abstract
This report represents the 35th annual edition of the Nebraska Farm Real Estate Market Developments series. It has continued to provide an important informational role regarding agricultural land market dynamics for the many stakeholders. As stated in the introduction of the first annual report: “The dynamics of the farm real estate market, particularly in recent years, suggests that accurate and complete information concerning this market is of great importance. From the standpoint of the public interest as well as that of individual participants, all land market decisions should be based upon a sound understanding of the current market situation.” 1 In today’s market, where market transactions exceeding a million dollars are the norm, objective market information and analysis is more critical than ever. The annual February 1st University of Nebraska-Lincoln Nebraska Farm Real Estate survey provides the foundation for that effort. This year, the February 2013 survey of over 100 expert-panel reporters from across the state provided current information and insight regarding the agricultural land market conditions in their areas. The panel members have been selected on the basis of being closely affiliated with agricultural land markets as certified agricultural appraisers, professional farm managers, agricultural lenders, etc. Moreover, the vast majority of panelists have reported annually for a number of years; which provides valuable historical consistency and context to the information provided. Based on their knowledge of market activity, reporters provide point-in-time estimates of current agricultural land values and cash rental rates for a variety of land types and classes. Comparing these current measures against previous year’s results provides important trend analysis over time. The historical UNL data series for Nebraska agricultural land values going back to 1978; the agricultural cash rental rate series back to 1981; and the USDA historical all-land value series are included in the appendix to this report. In addition to the point-in-time estimates, panel reporters provide details regarding actual sales transactions which have occurred over the previous 12 months. This year, our panel provided information on 520 sales that were considered representative of the recent agricultural land market. This gives important insight into the characteristics of recent sales as well as benchmark indicators for studying trends over time. Because the state is quite diverse in land resource characteristics and agricultural patterns, most of the market information is provided down to sub-state levels which are the Nebraska Agricultural Statistics Districts (See Figure 1). This provides greater geographically-appropriate detail that is not available from other data sources, such as quarterly value estimates from the Kansas City Federal Reserve and the Economic Research Service-USDA annual Farm Value and Cash Rent series for the state as a whole. But this is not to say that even sub-state levels of values and cash rents appropriately reflect the conditions of any local market in that geographic area. In fact, local differences in values and rents can be extreme. So, the information and analysis to follow here is a more realistic measure of general patterns and trends. Should one need information down to a specific parcel, we strongly recommend they seek out the services of a certified agricultural appraiser and/or a professional farm management firm.
Comments
Published by Department of Agricultural Economics, Report No. 193, June 2013. The website address is: http://www.agecon.unl.edu/realestate.html
Sincere appreciation goes to the survey reporters for their participation in the annual UNL Nebraska Farm Real Estate Market Survey. Without their valuable input, much of the information within this report would not exist.