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Burt County Land Prices Rise Above Average
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. Continue reading
Land Owners Warned Of ‘Pitfalls’ As Values Strengthen
Farmland continues to rise in value according to the Royal Institution of Chartered Surveyors (RICS) and, with a slow upswing in the economy, greater pressure will be brought to bear on those who own farmland to release it for development. “The attraction of disposing of parcels of ground for development is bound to increase as land values continue to rise, and many farmers and farm businesses will have land covered by option agreements with developers waiting to move,” said Mike Harrison, Partner in the Landed Estates and Rural Business Group of Saffery Champness. “Our concern is with those who intend to sell not only being totally aware of exactly what they are selling and the terms of that disposal, but also who actually owns the property in the first place. “Particularly where farms have expanded over time, and comprise a number of different businesses or structures, then the owners of the land and those who operate their business over it may be different and such differences may only come to light at the time of disposal. In addition the tax treatment of the sale may vary depending on the type of structure in which it is held, for example whether the disposal will be taxed at 10 per cent or more likely 28 per cent.” While many farm businesses will have everything well thought through, properly structured and the consequences taken into account, others will not, and such a process can open the inevitable can of worms. There are many pressures on getting the ‘vehicle’ going forward right – whether joint venture, option agreement or promotion agreement for example – and an assumption made over the ownership of the land in question. It may not be until both parties are well into proceedings that the consequences of such a sale become apparent. Mike Harrison also said that with the RICS survey predicting continued future strengthening of farmland prices the same applies for farms wishing to expand and to buy neighbouring land should it become available. He says: Any purchase requires careful thought in terms of the entity that will take ownership of that asset, and the consequences particularly in the longer term, of its retention or future disposal. Agricultural land prices in the south are outstripping the national average, with non-farming investors helping push the market along and to the south of the M3 and M4 corridors. Richard Liddiard, head of farm agency for national property consultancy Carter Jonas based in Newbury, says that while the national average price per acre for arable rose to £8,193 and pasture to £6,689 the strength of the market in Berkshire and Hampshire has driven values far above that level with arable regularly achieving £10,000 per acre and pasture £8,000. The larger difference between the two land types in this region illustrates the emphasis on arable crops rather than livestock farming. The strength of commercial farmland demand is not broad-based. Indeed, surveyors note that farmers in the main are discriminating in favour of large, top quality, neighbouring plots with as small a residential component as possible. As such, there is considerable price dispersion, even in the same areas; plots that are smaller and of lower soil quality are attracting much less interest and achieving lower average per acre prices. Looking forward, surveyors are very optimistic about commercial farmland price prospects over the next 12 months. Meanwhile, price expectations in the residential arena, whilst relatively modest, have turned positive for the first time since H2 2010. This may reflect developments in the broader national housing market. “We have seen some exceptional transactions during H1 of 2013 with the larger sales being dealt with ‘off market’ showing the strength of land as a safe haven and hedge against economic ills,” Richard Liddiard from Carter Jonas. “Whilst the UK economy is showing the green shoots of recovery I am still of the opinion that we are at the peak of the market for average or less well equiped farms. This will indicate that the best in class will still rise in value and be keenly sought after by the non-farming investors who are seeking the safe haven status and IHT tax advantages that land offers. We are also seeing more farms in the market and there are some holdings that are sticking particularly if they are overpriced or do not have strong local demand to push the values higher.” Continue reading
Timber Rules
NANDHINI SUNDAR Timber in house design. The strength of timber is dependent on its usage and seasoning. But what sets it apart from other building materials is its beauty, says Nandhini Sundar Use of wood in housing is as old as dwellings, dating back to the very first hut that was built with tree branches and leaves. While history has seen many experiments with wood, where it featured as the main structural element, weaving in intricate geometrical concepts, incorporating arches and round shapes in timber frames, currently its use is more in aesthetics than functionality. Wood features as façade, on ceilings, walls, floors, furniture, and artefacts, meeting essentially the aesthetic requirements. Interestingly, every piece of timber has a different coefficient of strength. The strength is dependent on its usage and seasoning. What sets it apart from other building materials is its beauty, warmth and value besides cutting down on carbon emissions when plantation wood is opted for. Wood, when used in the interiors as panelling, or as rafters in the ceiling, or heavily in windows, on floors, can add a warmth and old world charm to the décor depending on the manner of depiction. Furniture made of wood, even sans intricate carving, can lend a rich tone. When represented in exotic forms, it appears stately and opulent, totally transforming the décor. Given the extensive use of wood historically in structures and interiors, most of the thematic representations of décor calls for extensive use of timber. While hardwood tends to last for centuries with little maintenance when seasoned right and kept indoors, wood can also be highly manipulated. It can be bent, sanded, cut, joined, and strengthened with pins. Interestingly no two pieces of wood are alike, which adds to its versatility. Natural seasoning Says Architect Satish Naik, Satish Naik & Associates, “Seasoning of wood can be done artificially as well as naturally though natural seasoning is lengthier, requiring soaking of logs in water and later drying in sunlight. A well-seasoned wood does not warp, bend or slit.” The manner of usage also determines its strength. For instance, teak yields maximum strength when used vertically while bamboo is totally flexible, allowing any manner of use. Says Architect Dinesh Verma, ACE Group Architects, “Bamboo can be assembled faster than other types of timber and withstands better harsher weather conditions.” Teak lends itself to decoration given its natural properties while bamboo serves as an excellent support for roofs where it can serve as structural element for the entire stretch of walls as well as ceiling. Stunning dwellings can be created using only bamboo. In rural areas, entire houses are made of bamboo. Bamboo is also excellent for creating exotic varieties of furniture and artefacts. “Bamboo roots come in exquisite shapes that lend themselves to creating mindboggling varieties of art pieces and furniture,” adds Naik. Some of the early uses of timber veered around mahogany, ebony, rose, teak, camphor and walnut. These varieties were crafted to reflect superb craftsmanship. Rosewood, teak and walnut are still sparingly used though the opulent mahogany and the queen of timber, ebony, have gone completely out of circulation, with ebony now listed under the preserved category. The black-coloured ebony is also credited with healing properties, manifesting as hand railings in mansions. Interestingly, only a small portion of ebony’s trunk forms the core of the timber with the rest assuming a lighter shade. Rare Paduk Paduk is another interesting variety of timber found in the forests of Andaman and is unique as it is grown only in this region. “The rare Paduk, referred as the chameleon of timber, has an interesting characteristic of losing its colour completely when exposed to sunlight and regaining it once brought back under shade,” says Naik. Many new varieties of timber have now come to use, each with their own unique individual characteristics, notable ones being sal wood, beach wood, steam wood, American walnut, and rubber wood. Cane too has come to occupy a significant space in timber varieties. Given its lightness, cane is becoming more popular especially with exotic varieties of furniture being crafted using it. Interestingly, even discarded wooden railway sleepers form excellent material for outdoor use. Adds Verma, “These can be used as garden seating elements, to pave the pathways in the garden, even for cladding the façade to give a woody cottage look to the residence.” One of Verma’s residence projects displays such exterior cladding where the hard wooden planks have been bolted in to facilitate easy removal for maintenance. Continue reading
