Despite a recent dip in net farm income, U.S. farmland values remain historically high, according to a specialty asset management expert. While a sharp run-up in prices occurred in 2021 and 2022, the market is currently in a plateau pattern, with strong demand supporting high-quality acreage.
Cole Nickerson, Area Sales Manager for Farmers National Company, noted the contradiction between the struggling agricultural economy and resilient land prices.
“We’ve kind of seen a leveling off the last few years as net farm income has fallen a little bit,” Nickerson tells Mid-West Farm Report. “But we haven’t seen a big pullback in land values.”
He explains that high-quality farmland is selling well, even seeing increases. Meanwhile, acres with drainage or access issues have seen a small pullback, but they’re still at historically high prices.
Certain geographies and land types are seeing the strongest demand and highest sale prices, such as the land in the path of development near cities. Recreational and pasture land are supported by a robust cattle market.
Nickerson says a major factor poised to impact the market is an impending transfer of ownership. He says roughly 70 percent of U.S. farmland is expected to change hands in the next 20 years due to the aging Baby Boomer generation. Currently, 66 percent of farmland owners are age 65 and older, a significant jump from 29 percent in 1982.
He advises farmers and landowners to be prepared for this influx of supply. Beyond buying and selling, Nickerson stresses the urgency of succession planning and basic estate planning.
Don’t you feel with farmers competing for land we are doing it to ourselves