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January 11, 2021
The last quarter of 2020 saw a surge in land sale activity at Farmers National Company. The dollar volume of real estate sales was up 35% compared to the previous several years. Acres sold were up 52% representing a mix of ranch land and farmland. The value of land sold through auctions was up 28% while private treaty sales volume was up 90%. This may not have been the uniform experience across the land market, but within Farmers National Company's land sales business, it was a busy three months.
There were a number of reasons behind the increase for the company. Besides landowners looking to Farmers National Company for its local and national expertise in successfully selling land, there were other factors driving the increase in sales activity throughout Farmers National Company's reach. The majority of the land sales continued to be by estates, inheritors, and families deciding it was time to sell the farm, but quite a few had larger holdings with multiple farms which added to the company's sales.
An important factor in the increased sales volume for Farmers National Company was the surge in prices for good quality cropland. At company auctions across the grain belt, good cropland was being sold at prices that ranged from steady to significantly higher than was expected. Farmer demand was strong as well as individual investor interest. The large increase in private treaty sales was partially a result of Covid-19 as some sellers and local restrictions dictated a move away from a public auction. The effect also drove an increase in on-line auction activity by the company.
Looking ahead, the supply of ag land on the market will not change much as it remains mostly inheritors, estates, and non-operating families who sell. Farm finances will be adequate for another year with rising commodity prices. Active demand for good cropland by farmers and investors will continue for now. Land sales will slow somewhat as is typical during late winter, but the expectation will be for steady to firm land prices.
Senior Vice President - Real Estate Operations
|Category: Agricultural Real Estate News|