![]() ![]() Dryland cropland with irrigation potential rose 16% for the state. Average increases in the other five districts ranged from 7% to 13%. Districts in the Northwest, South, and Southeast increased by 15% to 21%. Survey participants reported that these underlying financial forces guided the agricultural real estate markets.Ĭompared to the prior year, the estimated market value of dryland cropland without irrigation potential rose by 13% across the state (Table 1). Related agricultural assets such as tractors, machinery, and transportation equipment followed similar trends as operations faced rising expenses in acquiring production assets. Operators and investors use land purchases to navigate inflation and grow farms or ranches. Rising interest rates may impact agricultural real estate markets without additional profitability to offset the rising financing expense.įavorable financial positions and inflationary concerns left many operations acquiring tangible assets to hedge their purchasing power. The interest rate for agricultural real estate loans rose from about 4.5% to 7.2% across states in the Tenth District of the Federal Reserve Bank of Kansas City (Scott & Kreitman, 2023). Early in 2022, record-low interest rates on agricultural loans rose to a decade high by the end of the year. Rising interest rates matched higher net farm incomes to combat inflation. The financial position of many operations improved in 2022. The financial position of many operations improved as the working capital increased by 60% for the farm and ranch sector (Cowley & Kreitman, 2023). Forecasted estimates for Nebraska place net farm income in 2023 at about $7.956 billion (Lubben, 2023). Farm expenses for fertilizer, fuel, and related inputs increased by $3.189 billion over the prior year but appear steady, with better availability for the upcoming production season. Higher commodity prices led to a net farm income of approximately $8.033 billion in Nebraska for 2022. Agricultural tractors and equipment also experienced a rise in market value as operators updated machinery lines. ![]() As a tangible investment to hedge against inflation, many operators turned to agricultural land markets as long-term investments. Rising commodity prices helped the financial position of many operations despite rising input expenses and drought concerns. Land industry professionals responding to the annual survey attributed the rise in Nebraska agricultural real estate values to current crop and livestock prices, purchases for operation expansion, the financial health of current owners, and as a hedge against inflation. Results from the survey are divided by land class and summarized by the eight Agricultural Statistic Districts of Nebraska (Figure 2).įigure 2: Nebraska Agricultural Statistics Districts The University of Nebraska-Lincoln’s Department of Agricultural Economics annually surveys land industry professionals across Nebraska, including appraisers, farm and ranch managers, agricultural bankers, and related industry professionals. Source: aUNL Nebraska Farm Real Etstate Marker Surveys, 1978 - 2023 Historic Nebraska Average Land Value, Selected Years 1978-2023 a This marks the second-largest increase in the market value of agricultural land in Nebraska since 2014 and the highest non-inflation-adjusted state-wide land value in the 45-year history of the survey.įigure 1. The market value of agricultural land in Nebraska increased by 14% over the prior year to an average of $3,835 per acre, according to the 2023 Nebraska Farm Real Estate Market Survey (Figure 1 and Table 1).
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