January 28, 2019
One of the underpinnings providing support to land values the
past several years has been the lower volume of land for sale on the market. From
the peak in sales volume in 2012-2013, the land market experienced a 45% drop
in sales over the succeeding years which continues today at the lower level. This was evidenced by sales volume and the number of
transactions.
The Realtors Land Institute recently reported results from its annual
survey of land brokers. In the report, they noted that the dollar volume of
agricultural land sales from October, 2017 to October, 2018 rose only 1%. During
the same time period, sales volume for Farmers National Company grew by 5%
which followed annual increases since the fall off from the sales peak. These land
sales came mostly from non-operating landowners who for various reasons decided
that it was time to sell.
Going forward, the industry is expecting another small increase
in sales activity for the year. Some regions are seeing a few more sales take
place, while other areas continue to experience a derth
of farmland sales. Non-operating landowners will remain the dominant sellers,
but there is the general expectation to see a number of additional land sales
caused by the continuing financial stress in production agriculture. The amount
of financially caused sales is not expected to be large, but there will be
somewhat more of these throughout the coming year.
Randy Dickhut
Senior Vice
President - Real Estate Operations
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