KEYC - Farmland Prices on the Rise

Farmland Prices on the Rise

MANKATO, Minn. -

Farmers who depend on the land to earn their living understand its value--and now that land is worth more than ever.

Chuck Wingert at Wingert Realty and Land Services says, "Land prices have moved up substantially."

Wingert says prices have been rising since 1986, but recently they have been rising even faster.

At the end of 2011, good farmland was selling for just over $8,000 an acre.

Wingert says, "Now already in 2012 we have moved up where high quality land is selling somewhere between $9,000 and the low $10,000's."

Low interest rates and high crop prices are the driving forces behind increasing land value.

For farmers who already have land and are looking to sell, the high property values are great, but the high prices and low supply are hard on farmers who are looking to expand, or just get into the business

Wingert says, "There has been less supply, less land on the market in the last decade than in history."

Typically there is about 2–2.5% of land that comes to sale in a year, but recently it has only been about 1% so there has been strong demand and limited supply.

Wingert says, "There is some areas that never come for sale and if there is nothing for sale in my neighborhood and nothing for rent in my neighborhood what do I do?"

Wingert does expect some extra sellers coming this fall.

Wingert says, "Sellers desire to take advantage of not only record high land prices, but we have the bush tax plans that are going to expire at the end of the year."

So if farmers are looking to sell in the next couple years, they will get more money in their pocket if do it before January first.

Whether farmers are buying or selling land, with this year's decent yield and high crop prices, the value of the land in undeniable.

Wingert says farmers aren't the only ones looking to buy agricultural land, he says it's common to see investors from all over the country at his auctions who are looking to buy farmland and rent it out to increase their land holdings.