Farmland values rose slightly in 2017, according to the most recent appraisal update conducted by Omaha-based Farm Credit Services of America and eastern Kansas's Frontier Farm Credit. But the update notes values continue to decline in Kansas, Nebraska and South Dakota.
The update found farmland values on the 21 Iowa benchmark farms rose 1.4% for the last half of 2017 and increased 1.8% for the year. Values on the seven eastern Kansas benchmark farms eased 0.1% the last half of 2017 and declined 3.1% for the year. Nebraska farmland values declined 2.8% on the state's 18 benchmark farm for the last half o 2017 and all of 2017. Values on South Dakota's 23 benchmark farms slipped 1.3% the last half of 2017 and decreased 3.1% on the year. Wyoming's two benchmark farms and ranches rose 2.5% the last half of 2017 and increased 3.2% for the year.
Looking at farmland values on a five-year basis, the update notes Iowa farmland values are down 12.8%, Nebraska values are down 5.1%, South Dakota's values are up 15.6% and Wyoming's values are 38.5% higher. Looking are cropland values exclusively, the update notes cropland values are down 19.4% from their peak in 2013; Nebraska values are down 17.4% from their peak and South Dakota is off 9.2% from its peak.
Divergence is evident between cropland values and ranchland/pasture values. Iowa cropland is up 1.8% on an annual basis while pastureland is down a slight 0.4%. In eastern Kansas, cropland values are down 6.5% while pastureland is up 1.2%. Nebraska's cropland is down 2.4% while pastureland is up 2.3%. In Wyoming, cropland is up 5.1% and ranchland is up 1.4%.
"Farmland prices were relatively steady across the associations compared to a year ago," the lenders state. "The average quality of land sold also remained stable during this time and has not changed substantially over the past few years. Overall farmland sales activity declined compared to 2016. Public land auction activity for Iowa increased 2% from 2016 while activity in the other FCSAmerica/ Frontier Farm Credit territory decreased an average of 22% from a year ago."
"Farmland values have declined less than initially predicted by various real estate organizations in 2015," the lenders notes. "Values have adjusted to reflect the current market supply and demand in each region and appear to be establishing a new normal; despite seasonal fluctuations in land sale values, values have generally stayed consistent since 2015. Tight profit margins on grain and livestock operations continue to drive purchase decisions as operators focus on the profitability of agricultural real estate."