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July 8, 2019
Location and quality are key drivers of land prices throughout the northern plains despite the overall slower land market. Good quality farmland normally sells well as will recreation properties in the right locations. But lower quality farmland saw a decline this past year according to Brian Mohr area sales manager for Farmers National Company
We are starting to see increasing signs of financial stress among farmers approaching some of what we saw in the 1990s observed Mohr. The stress on farmers varies by area depending on crop yields the past several years. Working capital for most producers is declining with the tighter margins putting pressure on loan repayment capacity.
Despite issues, land values have exhibited an underlying base of strength from several factors including historically low interest rates, low supply of land for sale, and adequate buying capital. The other side of the land value equation is seeing increased uncertainties that could weigh down on the land market as time goes by.
If someone is thinking about selling their farmland or buying land as an investment, they for one need to know the local land market as each area is reacting somewhat differently which could influence price expectations. The supply of land for sale as well as the number of active buyers will be important influences on the land market over the coming months.
Senior Vice President - Real Estate Operations
|Category: Agricultural Real Estate News|