The value of Texas dryland cropland rose 6% for the year ended in June, according to the Federal Reserve Bank of Dallas. The bank serves all of Texas, southern New Mexico and northern Louisiana. Dryland cropland rose 5.9% across the entire bank district while the value of irrigated cropland gained 5.1% and ranchland increased 5.3% across the district. The bank says Texas dryland cropland averages $1,956 an acre statewide; irrigated Texas cropland averages $2,068, up 4.2%; and Texas ranchland averages $1,803 an acre, up 5.6% versus a year earlier. See the numbers here… LandOwner Newsletter 7-2014
Courtesy of LandOwner Newsletter a publication of ProFarmer.com
Before purchasing farmland read this great article from AgWeb.com….by John Blanchfield and the American Bankers Association’s Agricultural and Rural Bankers Committee (reprinted from AgWeb.com)
“Rising crop and livestock prices have generated significant profits for many farmers, which some are using to buy additional land. The increased demand has driven land values to record highs in some areas. The American Bankers Association’s Agricultural and Rural Bankers Committee, which is comprised of leading agricultural bankers in the country, has developed these recommendations for buying farmland.” Click here to see the rest of this article.
According to information supplied by the National Association of Realtors through the Realtor Land Institute, “the volume of land sold increased between 2010 through 2013 from $4,031,200,331 to $16,505,762,861,”
Here is an interesting perspective on land values from Sara Schafer, AgWeb.com Business and Crops Online Editor. Sara talks about Global factors that impact your farm value. She quotes Tim Hopper, chief economist at TIAA-CREF, a financial services and investing organizaiton, saying, “People have an intuitive sense of what their land is worth. Yet to stay ahead of the curve, he says, farmers should think beyond their farm gates.” Click here for the entire article.
Here’s an excerpt from an article on land values published in the November 2013 issue of Progressive Farmer….”Clift Land Brokers has a big footprint when it comes to farm and ranch land, leaving George Clift with a broad perspective. The broker says there are two regions he’d look to invest in today: the High Plains of Texas or the eastern areas of North Carolina, Georgia and Alabama. In the High Plains, he’d focus on grain-deficit areas, where the commodity brings a premium over the Midwest. He says land here is a consistent producer, drawing from underground aquifers.
“Returns of farms in the High Plains will exceed that of other regions, but you have to understand it. Here it’s all about water and the regulation of water.”
Land prices in the High Plains can range from $750 to $6,000 an acre, depending on the water situation, he explains. But irrigated cropping means you control the variables. A typical irrigated corn crop will take 24 inches of water, and yields will consistently average 220 to 240 bushels per acre.
Looking east, Clift would want to buy land where you could take out trees and convert to row crops. He expects yields on his investment would be 5 to 6% in the High Plains versus 3% in the Midwest, 4 to 5% in the Delta and 4 to 5% in the eastern states.
Here’s the full article Progressive Farmer – Land Values