Taylor Scott International News
Burt County Land Prices climb Burt County land prices reach some of the highest values in Northeast Nebraska in 2013. Posted: Sunday, September 22, 2013 6:05 pm | Updated: 6:20 pm, Sun Sep 22, 2013. Jamie Horter, Editor Lyons Mirror-Sun lmsun@abbnebraska.com The average value of farmland in Northeast Nebraska topped an average of $6,165 per acre this year, up 24% over last year according to University of Nebraska Department of Agricultural Economics. Irrigated cropland in the Northeast part of the state is valued at $8,715 per acre. Tillable pasture land stands at $3,575 per acre. Dryland crop ground (without irrigation) averaged $5,995 per acre. In Burt County, land is trending higher than the average for Northeast Nebraska. Recent sale bills from selected Burt County auctions are outlined in the table. Land prices have increased 126% over the past five years in Northeast Nebraska. The University of Nebraska has reported that three factors have played a heavy influence on the increase in land prices. Crop prices have played the greatest influence. Additionally, post-drought price spikes in grain markets in 2012 resulted in land price boosts up through the beginning of 2013. Active farm buyers looking to expand their large farming operations play a significant factor in increasing land values. Such buyers tend to have a dominance in local markets, where the buyer side is reduced to a small number of large operations. They report that federal farm program direct payments are not believed to have an effect on land values. Direct payments are paid to farmers by the federal government regardless of price or production. However, the report acknowledges that federal farm subsidies for crop insurance are capitalized into land values. The federal government pays, on average, 62% of the premiums for crop insurance. As land prices continue to increase, this can be challenging for local beginning farmers seeking to get started. Virginia Meyer, Rural Organizer at the Center for Rural Affairs in Lyons, works to help beginning farmers get started. She notes three primary ways in which beginning farmers gain access to land. Some beginning farmers lease land from family members. “Most medium to large scale beginning farmers are able to access land through family connections and working with family members who are cutting back or retiring from farming,” Virginia noted. Beginning farmers without access to family-owned land have the greatest challenge. “They compete for leases against bigger farmers who can pay more to lease the ground. I’ve heard of beginners leasing less-than-desirable ground because the bigger farms are not interested in that ground.” This includes land that is hilly, rocky, and has poor soil quality. A third group of beginners opts to add value into working less land. They may choose to grow vegetables and fruits or raise poultry and other small livestock. “Beginners can generally afford smaller acreages while large tracts of land are out of reach,” she explained. Though the value of land is currently on the rise, the University of Nebraska reports that net rates of return, however, have been on a steady decrease since 1990. In Northeast Nebraska, the net rate of return for irrigated land in 1990 was 6.9%. In 2013, it is almost half that, at 3.8%. That means that for land priced at $10,000 per acre, the return on investment would be $380 per acre in annual net earnings. Currently, the rise in land values has not hindered buyers from purchasing land to expand their operations. If sharp downturns are experienced in annual returns to land, or if interest rates were to rise, a decrease in land value could occur. For now, property owners in Burt County continue to see some of the highest land values in Northeast Nebraska. Taylor Scott International
Taylor Scott International, Taylor Scott
