2016 Nebraska Farmland Values and Rental Rates

Cornhusker Economics August 3, 20162016 Nebraska Farmland Values and Rental Rates


Landlords in Nebraska rent out nearly 20.1 million acres or nearly 45 percent of the 45 million acres of farmland across the state (USDA NASS, 2015). The Nebraska Farm Real Estate Market Highlights Report 2015-2016 provides recent trends on land values and rental rates for landlords, tenants, and stakeholders in the state. Findings from the survey summarize current market values and rental rates for agricultural land across the eight Nebraska Agricultural Statistic Districts.

Recent findings from the University of Nebraska–Lincoln Nebraska Farm Real Estate Market Survey for 2016 indicate that as of February 1, 2016, the weighted average farmland value declined by about 4 percent over the prior 12-month period to $3,115 per acre (Figure 1 and Table 1). This decline marks the second consecutive year of lower weighted average farmland values in Nebraska. The weighted average farmland value set the all-time record high in 2014.

Declines in cropland prices generally trended lower across the state. Gravity and center pivot irrigated cropland trended lower at $6,480 and $6,940 per acre for declines of 6 and 5 percent respectively. Dryland cropland with irrigation potential also fell 5 percent to an average of $4,785 per acre, but dryland cropland without irrigation potential recorded a slight uptick of 2 percent to $3,470 per acre.
Map of Nebraska depicting Average Value of Nebraska Farmland, February 1, 2016 and Percent Change From Year EarlierFigure 1. Average Value of Nebraska Farmland, February 1, 2016 and Percent Change From Year Earlier


Table 1. Average Reported Value of Nebraska Farmland for Different Land Types by Agricultural Statistics District, February 1, 2016a
Type of LandNorthwestNorthNortheastCentralEastSouthwestSouthSoutheastStatec
Dryland Cropland (No Irrigation Potential)
$/acre 745 1,650 5,760 3,235 6,360 1,955 3,575 4,845 3,470
% change 2 4 2 4 6 5 7 -4 2
Dryland Cropland (Irrigation Potential)
$/acre 790 2,150 6,715 3,850 7,165 1,815 4,315 6,450 4,785
% change 6 -6 -5 -6 -2 -7 -4 -7 -5
Grazing Land (Tillable)
$/acre 565 1,325 3,955 2,460 4,370 1,070 2,240 3,200 1,495
% change 6 -5 7 -6 4 -6 -5 5 -1
Grazing Land (Nontillable)
$/acre 480 740 2,475 1,925 2,795 915 1,690 2,205 975
% change -2 -1 -4 -5 -7 -3 -7 -3 -3
Hayland
$/acre 890 1,460 3,430 2,585 3,200 1,700 2,340 2,780 1,965
% change -20 -23 -6 -11 -22 -13 -21 -10 -17
Gravity Irrigated Cropland
$/acre 2,970 3,970 7,220 6,560 8,115 4,390 6,265 7,375 6,480
% change -8 -4 -2 -5 -4 -1 -12 -8 -6
Center Pivot Irrigated Croplandb
$/acre 3,290 4,350 7,880 7,530 9,410 5,330 7,240 9,185 6,940
% change -9 -10 -3 -4 -2 -8 -12 -3 -5
All Land Averagec
$/acre 820 1,245 5,980 3,780 6,990 1,960 4,255 5,675 3,115
% change -5 -6 -3 -4 -2 -5 -8 -5 -4
aUNL Nebraska Farm Real Estate Market Surveys, 2015 and 2016.
b Value of pivot not included in per-acre value.
c Weighted averages.
Current crop and livestock prices rank among the top factors weighing down agricultural land values in Nebraska for 2016. Purchasing land for farm expansion and 1031 tax exchanges were listed as two of the highest positive impacts on regional land values. Property tax levels and future property tax policies once again were ranked very negatively by panel members on the potential impact this landownership expense might have on agricultural ground.

Declining commodity prices in 2016 translated to lower cash rental rates for cropland and pasture rental rates across Nebraska (Table 2). Depending upon the region of the state, cash rental rates trended from 2 to 17 percent lower. Irrigated and dryland cropland in the Northeast, East, and Southeast Districts of Nebraska followed similar trends as the rate of decline for these districts were on average less than those of western regions. Rental rates for cow-calf pairs along with stockers in 2016 declined from record rental rates set in 2015. On average, cow-calf pairs and stockers fell about 10 percent compared to the prior year.
Table 2. Reported Cash Rental Rates for Various Types of Nebraska Farmland and Pasture: 2016 Averages, Percent Change from 2015 and Quality Ranges by Agricultural Statistics Districta
Type of LandNorthwestNorthNortheastCentralEastSouthwestSouthSoutheast
Dryland Cropland
Average 32 60 225 96 200 42 80 165
% Change -9 -8 -4 -8 -2 -7 -6 -3
High Third Quality 45 70 290 125 250 57 110 225
Low Third Quality 23 43 180 75 160 29 64 125
Gravity Irrigated Cropland
Average 125 175 275 230 285 180 215 250
% Change -7 -10 -4 -2 -5 -3 -2 -2
High Third Quality 175 195 325 265 340 220 260 305
Low Third Quality 100 135 260 195 245 145 180 220
Center Pivot Irrigated Croplandb
Average 170 220 345 240 320 225 240 290
% Change -3 -6 -5 -2 -3 -10 -6 -3
High Third Quality 250 260 405 290 375 255 280 355
Low Third Quality 145 195 275 205 270 210 195 255
Pasture
Average 12 26 75 36 61 24 37 54
% Change -11 -13 -17 -10 -5 -4 -8 -2
High Third Quality 21 38 98 52 76 34 48 69
Low Third Quality 9 20 48 32 45 21 27 37
Cow-Calf Pair Ratesc (Dollars Per Pair)
Average 36.15 63.8 59.7 58.1 56.4 57.2 49.1 52
% Change -12 -3 -4 -9 -13 -6 -15 -12
High Third Quality 48.35 77.2 75.5 69.3 71.2 67.85 57.5 66
Low Third Quality 26.55 51.1 48 44.8 45 47.85 35 38.35

Source:  a Reporters’ estimated cash rental rates (both averages and ranges) from the UNL Nebraska Farm Real Estate Market Survey, 2015 and 2016.
b Cash rents on center pivot land assumes landowners own total irrigation system.
c A cow-calf pair is typically considered to be 1.25 to 1.30 animal units (animal unit being 1,000 lb. animal) for a five-month grazing season. However, this can vary depending on weight of cow and age of calf. 


Survey results shown and discussed in this report are findings from the University of Nebraska–Lincoln 2016 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 may be found here.

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 directly contact Jane Witte by phone: 402-472-1913 or email: janewitte@unl.edu.

PDF


Jim Jansen
Nebraska Extension
University of Nebraska-Lincoln
jjansen4@unl.edu
402-254-6821

Roger Wilson
Department of Agricultural Economics
University of Nebraska-Lincoln


Subscribe to Cornhusker Economics

More Articles


Market Report

Topic: