TOPEKA, Kan. (AP) — Stable farm incomes, timely rain and international instability have helped keep Kansas farmland values relatively unchanged from a year ago, despite concerns from some economists that an agriculture bubble might be on the verge of deflating.
Farmland sales nationwide are down from the record levels of 2013, according to Farmers National Co., which conducts land auctions, but were still strong.
In Kansas, irrigated farmland sold at auction for up to $6,000 this month, which is about the same as in June 2013, The Topeka Capital-Journal reported. Top prices for an irrigated acre this month varied from a high of $12,500 in Illinois to a low of $3,000 in Oklahoma.
Lower-quality land has dropped in price, said Brock Thurman, vice president of Farmers National’s operations in Kansas and Oklahoma, but high-quality ground still commands strong prices.
Most demand is from local farmers bidding each other, he said, because they know whoever buys farm land probably won’t sell it again in this generation.
“The higher-quality land can still top the market if you have strong local demand,” Thurman said. “The really good stuff, there’s always a strong local demand for that.”
Farmland prices benefited from steady farm income that economists had predicted could fall by as much as 20 percent and drag down the price they were willing to pay for land, said Randy Dickhut, vice president of real estate operations for Farmers National.
Farm income was boosted by increases in the price of grain and meat in 2014 due to weather conditions, instability in Ukraine and other factors, he said. With relatively few farms on the market, prices were encouraged to rise or remain stable.
“Market factors aligned to create an optimal situation for our industry,” Dickhut said. “Due to this, we continue to see a strong land market. While there are no record-setting top values currently, land prices are not going down significantly.”
Kansas farmland prices declined 10 percent in January compared with the same month a year ago, but it’s not clear if that was a blip reflecting the selling prices of a small number of farms, he said.
Information from: The Topeka (Kan.) Capital-Journal, http://www.cjonline.com