Average Nebraska land values declined 3% from last year, extending a half-decade downturn, according to an annual survey from the University of Nebraska.
The average value of an acre of land was $2,645 for the year ending February 1, 2019. That's a 3%, or $75 per acre, decline from the prior year's value of $2,720 per acre. Rates of decline were lower in the eastern third and central region of Nebraska and higher in the western two-thirds of the state.
The estimated total value of agricultural land and buildings in Nebraska dropped to $125.3 billion, while the market value declined to $3.6 billion between 2018 and 2019.
Nebraska farm real estate set the highest non-inflation adjusted average value in 2014 at $3,315 per acre. Two years prior to the market high, the price of corn peaked at $6.89 amid record setting drought.
Cropland showed declines ranging from 2% to 3% compared to the prior year, while values for haying and grazing land showed dropped by 5% to 6%.
Land suited for dryland crop production averaged of $3,040 and $4,010 per acre, while the average value of irrigated acres ranged between $5,690 and $5,970 per acre.
There were higher rates in decline, ranging from 4% to 7%, in the Northwest, Southwest and southern districts due to restrictions in irrigation appropriations and new developments, the report states.
Land classes serving the livestock industry, including grazing land that's either tillable or non-tillable and hayland, noted the highest rate of decline compared to last year. Tillable grazing land averaged $1,185 per acre, while nontillable land averaged $795 per acre and hayland averaged $1,615 per acre.
Regionally, western Nebraska district land values averaged a 4% to 6% decline, while eastern districts were only 1% to 3%.
Cash rental rates continued to trend down across Nebraska for the 2019 growing year. These declines ranged from 2% to 8% with the exception of several small increases in dryland and center pivot irrigated cropland in the East and gravity irrigated cropland in the Northeast.
The report says current crop prices, property taxes and farm input costs are the most negative forces leading to the lower market value of land across the state. Additional economic forces placing strong negative pressure on the real estate markets included future property tax policies and the financial health of farmers.
The prolonged downturn in commodity prices has stakeholders concerned about the financial circumstances of many agricultural producers across the state, according to the report. As a result, since the peak in the all-land market value, the price of land has declined by an average $670 per acre.
The report is available here: https://agecon.unl.edu/…
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