Nebraska’s agricultural land values have decreased for the second consecutive year.
According to a preliminary report from the University of Nebraska Lincoln’s annual Farm Real Estate Market Survey, acreage prices in the state have dropped 1%, down to an average of just under $4,000 per acre. The drop comes after almost five straight years of price increases.
Jim Jansen, an agricultural economist with UNL and the report’s author, said a multitude of factors contributed to the drop in prices, including increased input costs and high interest rates on farm loans.
“Those conditions are leading producers and lenders to take a more cautious approach when navigating these financial pressures,” Jansen said.
The average cost has dropped to an average of about $3,900 per acre of cropland.
There is good news, though, for Nebraska’s ranchers. The average value of grazing land and hayland in Nebraska has increased by between 4% and 7% due in part to a renewed nationwide demand for beef.
“We’ve seen some slight to moderate increases in the market value of grazing land," Jansen said. "So the profitability of farming or ranching is reflected by the real asset values associated with those industries.”
The recent wildfires earlier this month could drop those grazing land values, however. Jansen said it will most likely depend on how quickly the forage grasses can grow back.
“In the short run, we’ll see how people can fare through these things, if there’s any potential that the grass comes back this summer," he said.
He added that’s guaranteed for the unique landscape that is Nebraska’s Sandhills. As dry conditions continue to plague the region’s ranchers, the forage’s return seems less and less certain, which may impact the grazing land market.
“Especially in the Sandhills, there are some geographically sensitive areas that cattle graze on and we’ll have to keep an eye on what happens to those areas in addition to how that affects real estate markets," Jansen said.