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October 21, 2019
As American producers move through harvest this time of year, results will be all over the board ranging from good crops in some areas to many farms with nothing to harvest due to the historically widespread delayed and prevented planting. Harvest has now been slowed in many locations of the grain belt because of September and October rains coupled with later maturing crops caused by the slow start in the spring. On top of these weather woes, the northern reaches experienced a recent snowstorm damaging crops and causing further delays. Early freezing temperatures have already affected potato harvest in Idaho and could cause trouble with sugar beet harvest in the Red River Valley. Final crop yields and production across the U.S. will not be known until harvest is complete, which could be later than normal.
The agricultural land market has been fairly stable throughout 2019 despite influencing factors being all over the board. Weather has been the biggest wild card this year, but other uncertainties have contributed to 2019 being a historic year in agriculture. Trade tariffs and Market Facilitation Program payment uncertainties and how these would affect farm income have been influencing U.S. agriculture all year. Interest rate trends have changed during the year bringing lower rates and stable to lower capitalization rates for farmland. African Swine Fever is an unprecedented event wiping out hundreds of millions of hogs in the world and changing meat demand. A potential trade war with the European Union could add to further uncertainty for American agriculture in 2019 and beyond.
Pre-harvest auctions and land sales saw stable and sometimes better than anticipated prices being paid for good quality land. As the quantity of farmland for sale continues to be on the average to lower side of normal, good quality farms are in demand when they do come up for sale. Farmers continue to be the main buyers of farmland in most regions while investors are also in the market for the right property. The volume of winter sales pick up after harvest and buying demand could be all over the board depending on harvest outcome and the outlook in the region for 2020.
In a few months, more will be known about how the land market is trending as Farmers National Company has a large number of auctions and bid sales scheduled into early winter on top of extensive listings of land for sale. A more complete view of the land market will come as harvest results become known and producers work with their lenders for 2020 financing needs. The uncertainties in today's agriculture will continue to play out and each one may or may not exert influence on the land market. Time will tell as we move into 2020 in a few short months.
Land sold by Farmers National Company was up 25% year over year!
Senior Vice President - Real Estate Operations
|Category: Agricultural Real Estate News|