2018 USDA Land Value Report

Agricultural Land Values Highlights

The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,140 per acre for 2018, up $60 per acre (1.9 percent) from 2017 values. Regional changes in the average value of farm real estate ranged from an 8.3 percent increase in the Southern Plains region (includes Texas (9.1% increase) and Oklahoma (5.3% increase) to 1.4 percent decrease in the Northern Plains region. The highest farm real estate values were in the Corn Belt region at $6,430 per acre. The Mountain region had the lowest farm real estate value at $1,140 per acre.

This report from the USDA is a 22 page report.  Read the full report here.

Land Transition Can Lead to Unintended Consequences

Land Transition Can Lead to Unintended Consequences
by Allan Vyhnalek, University of Nebraska Extensions

Grandpa and Grandma farmed. They retired. They had two irrigated quarters. They had two sons who had started farming operations themselves. So, their transition plan was to give a quarter to each of the sons at their passing. Grandpa passed away, followed by the Grandmother about a year or so later. The lawyer handling the estate was not given specific instructions about the transfer of the quarters. He just put number one and number two in a hat, the sons drew a number.

Then there were problems. Turns out that one quarter was nearly perfect. Good soil, highly productive, and had a good well. The second quarter was sandy, alkali spots, significantly less productive and had a well that was in trouble, actually sucked air at times. There was a huge argument about being fair. One son felt it was fair that each got a quarter. The son who got quarter two didn’t feel like he was treated equitably at all.  See Entire Article

 

What the New Tax Law Means for Agriculture

New article May 16, 2018 by Farm Credit Bank of Texas (land.com)

The largest overhaul of the U.S. tax code in three decades went into effect this year, impacting farmers, ranchers and other rural landowners in a variety of ways. For the most part, financial experts anticipate benefits for these groups.

“The 2018 tax law changes include several items that I feel will be beneficial to agricultural producers,” says Burl Lowery, a Brownwood, Texas, certified public accountant and director of Central Texas Farm Credit. “The increase in the exemption in estate and generation-skipping taxes to $11.2 million in 2018 will allow more farmland to be passed to future generations with less or no estate tax.”  READ ARTICLE

Investing in Land for Retirement

March 8, 2018 Realtors Land Institute

Choosing how to save for retirement can be a decision that takes years. After all, that’s the money that you’ll be living on during your golden years. Most people stick to 401ks and stocks, but what many people don’t know is that you can invest in land real estate to save for retirement. Investing in land real estate can be a great way to save money long-term, but with any investment, you need to know what type of land to invest in, what sort of returns you can expect, and what to avoid when investing in land real estate.

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Breaking Down Mineral Rights

March 14, 2018, Realtor Land Institute Post

Mineral rights are so complex that most of the time, people would instead hire a lawyer to deal with them. The bad news is, there is a lot of truth in that statement. Mineral rights can be tied up in tricky deeds going back generations. The good news? We’ve collected the most commonly asked questions about mineral rights to help you get a better understanding of one of the most complex issues in the land industry.

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Thoughts on Interest Rates and Land Sales

by Stephen Donnell, SR VP Lending, Plains Land Bank, Amarillo, TX

Plains Land Bank logoInterest rates have been about as volatile as the commodity markets in recent months. Our long term interest rates have moved up and down over three-tenths of a percent since March. Some months, it appears the Fed’s increase in short term rates is pushing long term rates higher, only to see those rates fall back the next month. Very hard to predict. We have had a number of customers recently locking in some long term money to hedge against rising interest rates. That appears to be a sound strategy, especially if you can catch a dip in rates.

As to land sales, land prices and buyer interest, it just flat depends on where you are. Areas of the Panhandle have seen some softening of land values and there are farms for sale.  In other areas, the values have not backed off much, and there are very few farms listed for sale.  The “crash” in land values that some feared a couple of years ago has yet to materialize, and loan demand here at Plains Land Bank is running ahead of last year.   

 

Never Buy Land Without an ALC

Never Buy Land Without an ALC…. 4 reasons from an article on Land.com written by Luke Worrell, ALC

This article outlines 4 of the reasons you should never buy land without an ALC (Accredited Land Consultant)…..Trust….Skill….Knowledge…Connections.

“When it comes to selling land, I am absolutely convinced that ALCs are the best in the business.  For starters, you can only become a designated ALC after you have proven yourself in the field.”

Read the entire article here.

Double-Digit Jumps in Farmland Sales

June 6, 2017, Ag Web

Selling Opportunity for Landowners

For non-operating landowners, today’s prices offer an opportunity to sell and capture some of the land appreciation of the past few years, Dickhut says.

“So far, few farm operators are selling land, and investors continue to be in the market looking for opportunities to add acres to their holdings,” he says. “The slow decline in the land market is part of the reason some are selling.”

On the flip side, the current land market conditions also offer good buying opportunities.

See entire article on AgWeb.com

Developments in 2016 Texas Land Markets

Clift Land Brokers was well represented at the 27th Annual Outlook for Texas Land Markets in San Antonio in April. As usual, a lot of great information came out of this conference. One highlight was the presentation by Dr. Charles E. Gilliland,  PhD, Research Economist for Texas A & M University Real Estate Center on Texas Land Values. Click here for a copy of that presentation. 

While 2017 1st quarter land values were up statewide 1.8% over 2016 4th quarter, and while other regions showed an increase, Region 1 – TX Panhandle and South Plains Region was down 3.4% over the end of last year. There was too much good information to cover on this forum, so be sure to download Dr. Gilliland’s presentation.

Texas Land Value Trends 2016