2015 Nebraska Farmland Values and Rental Rates

Cornhusker Economics June 24, 2015

Nebraska agricultural land values declined two percent according to the recently published Nebraska Farm Real Estate Market Highlights. As of February 1, 2015, the weighted average farmland value for the state dropped over the prior 12-month period to $3,250 per acre (Figure 1 and Table 1). Cash rental rates for land in 2015 followed trends comparable to 2014 as irrigated and dryland cropland rental rates declined while pasture and cow-calf pair rental rates rose across Nebraska (Table 2).

Table 1. Average Reported Value of Nebraska Farmland

Type of Land	Northwest	North	Northeast	Central	East	Southwest	South	Southeast	State
Dryland Cropland (No Irrigation Potential)
$/acre % change	730 -14	1,580 -8	5,645 -12	3,115 -11	5,980 -9	1,966 -6	3,340 -4	5,060 -7	3,390 -9
Dryland Cropland (Irrigation Potential)
$/acre % change	870 -7	2,290 -4	7,065 -2	4,095 -17	7,310 -3	1,950 -4	4,510 -11	6,940 -2	5,030 -4
Grazing Land (Tillable)
$/acre % change	535 -3	1,395 21	3,695 -9	2,615 14	4,205 16	1,135 28	2,350 -3	3,035 -8	1,515 9
Grazing Land (Nontillable)
$/acre % change	490 21	745 19	2,580 4	2,030 22	3,010 20	945 17	1,815 2	2,275 5	1,005 16
Hayland
$/acre % change	1,115 9	1,905 15	3,630 25	2,890 23	4,080 24	1,965 27	2,955 26	3,100 23	2,355 20
Gravity Irrigated Cropland
$/acre % change	3,235 6	4,135 -2	7,355 1	6,905 -14	8,445 -3	4,435 -2	7,095 -3	7,995 -4	6,900 -6
Center Pivot Irrigated Croplanda
$/acre % change	3,625 -4	4,835 -3	8,150 -8	7,825 -12	9,575 -3	5,790 1	8,270 -2	9,425 -3	7,315 -5
All Land Averageb
$/acre % change	860 1	1,330 9	6,140 -5	3,955 -6	7,100 -3	2,065 4	4,625 -4	5,900 -3	3,250 -2

aValue of pivot not included in per acre value.
bWeighted averages.

Table 2.  Reported Cash Rental Rates for Various Types of Nebraska Farmland and Pasture: 2015 Averages, Percent Change from 2014 and Quality Ranges by Agricultural Statistics District

Type of Land	Northwest	North	Northeast	Central	East	Southwest	South	Southeast
Dryland Cropland
Average % change High Third Quality Low Third Quality	35 -13 50 25	65 -7 85 40	235 -4 305 175	105 -5 140 85	205 -5 255 155	45 -10 60 30	85 -6 115 65	170 -3 215 130
Gravity Irrigated Cropland
Average % change High Third Quality Low Third Quality	135 -7 180 75	195 -5 230 155	285 -2 335 225	235 -6 270 195	300 -5 355 260	185 -3 225 145	220 -2 270 175	255 -14 310 225
Center Pivot Irrigated Croplanda
Average % change High Third Quality Low Third Quality	175 -13 295 150	235 -6 275 190	365 -1 430 285	245 -6 295 215	330 -7 385 270	250 -18 310 225	255 -6 330 240	300 -10 360 265
Pasture
Average % change High Third Quality Low Third Quality	13.50 35 20 10	30 20 40 20	90 29 120 60	40 33 50 35	65 18 75 50	25 25 35 20	40 14 45 35	55 10 65 35
Cow-Calf Pair Rates (Dollars Per Month)b
Average % change High Third Qualityc Low Third Qualityc	40.90 53.60 35.00	65.55 83.35 53.90	62.05 81.00 45.50	64.10 78.15 56.75	64.55 79.80 50.95	60.70 75.00 52.15	57.50 66.50 48.25	58.90 68.25 46.25

a Cash rents on center pivot land assumes landowners own total irrigation system.
b A cow-calf pair is typically considered to be 1.25 to 1.30 animal units (animal unit being 1,000 lb. animal). However, this can vary depending on weight of cow and age of calf.
c Cow-calf pair rates will vary by services provided by the landowner.

Survey panel members indicated current crop prices and farm input costs as the most negative factors leading to a reduction in cash rental rates for cropland. Current livestock prices were noted as the most positive factor leading to higher pasture and cow-calf pair rental rates in Nebraska. Property tax levels and future property tax policies were also listed as negative factors impacting area land values in Nebraska for 2015.

Since February 1, 2014, the largest percent increase in land value for Nebraska reported by survey participants occurred in hayland and nontillable grazing land at 20 and 16 percent respectively. Like 2014, part of the reason for these increases relates to cattle prices remaining near record levels in 2015. The increase in price for these  two  land  classes  varied  across Nebraska.

The Southwest district reported the highest rate of increase for hayland at 27 percent with the other regions reporting increases ranging between 9 and 26 percent. Rates of increase for nontillable grazing land  ranged between 2 and 22 percent with the lower increase in values focusing in the Northeast, East, and Southeast.

Decreases in the value of dryland and irrigated cropland followed comparable trends. On average, irrigated cropland values declined at a slower rate than dryland cropland without irrigation potential. Gravity irrigated and center pivot irrigated cropland rates dropped 6 and 5 percent respectively throughout most of Nebraska, but a small increase of 6 percent was reported for the Northwest District. The decline in value for dryland cropland without irrigation potential ranged between 14 percent in the Northwest and 4 percent in the South District.

Cash rental rate trends across Nebraska were comparable to the changes in land values for the various classes of land. Pasture and cow-calf pair rental rates set new records across the state as industry participants demonstrated their willingness to bid up the value to use these resources. Tightening profit margins for grain producers resulted in rate declines for dryland and irrigated cropland across all of the districts.

Survey results shown and discussed in this report are findings  from  the  University  of  Nebraska - Lincoln 2014 Nebraska Farm Real Estate Market Survey. Land values and rental rates presented in this report are averages of survey panel members' responses by district. Actual land values and rental rates may vary depending upon the quality of the parcel and local market for an area. Complete results from the survey are available electronically via the Nebraska Farm Real Estate website: agecon.unl.edu/realestate

Land appraisers, farm managers, or agricultural finance professionals from Nebraska interested in participating in future Nebraska Farm Real Estate Market Surveys are invited to contact the Department of Agricultural Economics at the University of Nebraska-Lincoln. Interested parties can contact the Department of Agricultural Economics by phone: 402-472-1913 or email agecon@unl.edu

Jim Jansen, 402-254-6821
Nebraska Extension
jjansen4@unl.edu

Roger Wilson,  402-472-1771
Department of Agricultural Economics
University of Nebraska-Lincoln
rwilson6@unl.edu