OCTOBER 3, 2023:
As combines roll into fields this fall, there is a renewed sense of optimism when looking at the real estate market.
The current state of the ag land market is resilient, and the demand for high-quality farmland remains strong in the face of higher interest rates and lower commodity prices, according to Farmers National Company. However, the market will likely return to a more normal flow, evidenced by the slowdown of the appreciation rate of ag land, as well as the sales volume at Farmers National Company.
Regional drought pressure across portions of the Corn Belt have also softened short-term demand for land. Areas highly impacted by the drought have seen seasonal pressure, with the lowest-quality farms impacted the most, while demand for higher-quality land has remained stable. The solid demand for ag properties from people interested in expanding their farm operations or investment opportunities seems to be driving the interest in high-quality cropland.
SEPTEMBER 29, 2023:
Recent farmland sale prices and values have increased to levels never before seen in the agricultural land market.
Paul Shadegg, senior vice president of Real Estate Operations at Farmers National, says the momentum in the farmland market began building 25 years ago. But is it sustainable moving forward? There continues to be strong interest in buying ag land across the U.S. Both individual buyers and land investors have created this competitive atmosphere in the agricultural real estate market.
Shadegg and Farmers National predict that will increase moving through the second half of 2023. At the same time, properties offered to the market will likely be limited, which will help sustain current values. They also expect to see a plateau in land values based on past agriculture cycles and a new normal in land values. Land values will continue to be driven by buyer competition and available supply for sale.
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