2015 Nebraska Farmland Values and Rental Rates

Cornhusker Economics June 24, 2015

2015 Nebraska Farmland Values and Rental Rates

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).

Figure 1
Figure 1. Average Value of Nebraska Farmland, February 1, 2015 and Percent Change From a Year Earlier
Table 1. Average Reported Value of Nebraska Farmland
Type of LandNorthwestNorthNortheastCentralEastSouthwestSouthSoutheastState
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 LandNorthwestNorthNortheastCentralEastSouthwestSouthSoutheast
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

PDF

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

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