Farmland values in Minnesota and elsewhere are holding their own, despite earlier projections that farm incomes and land values would drop, according to a new report released Tuesday.
Farmers National Company, a farm and ranch real estate company based in Omaha, Neb., said that land prices have remained stable so far in 2014.
After the double-digit price increases seen in recent years, forecasters in late 2013 were pessimistic about the year ahead, according to the report. Some expected a softening in land values as grain prices started to decline.
But commodity price drops boosted worldwide demand for U.S. exports, the report said, resulting in higher grain prices than predicted. The result produced better farm incomes that stabilized land prices going into 2014.
Prices per acre for high quality land across the country range from $3,500 to as high as $12,500 in parts of Indiana, Illinois, Iowa and Nebraska. Values in the Upper Midwest remain strong overall, with sales reaching $9,000 per acre in Minnesota, according to the report.
Randy Dickhut, vice president of real estate operations for Farmers, said there were no record-setting top values, but land prices are not going down significantly either. The outlook for farms in 2014 remains positive, he said, and farmers are searching for high quality land to expand their operations. “I think economic forecasts overrated the demise of the U.S. land market,” he said. “Things didn’t fall apart, but instead held steady and strong.”