Farmland values increase slightly
Farmland values continued to rise last year and are once again reaching all-time record levels, according to a survey I conduct annually on bare farmland sales. However, the recent increase across the 14 Minnesota counties surveyed was only 0.8%.
I often receive requests for this information from across the state, although all counties surveyed are in southwestern Minnesota. Surveyed counties include Chippewa, Cottonwood, Jackson, Lac qui Parle, Lincoln, Lyon, Martin, Murray, Nobles, Pipestone, Redwood, Rock, Watonwan and Yellow Medicine.
Data from these counties indicated prices per acre rose from an average of $3,702 in 2008 to $3,733 in 2009, or an increase of 0.8%. This increase is significantly smaller than last year’s 30% increase. There was a lot of variability from 2008 to 2009. The largest increase was in Lac qui Parle County with an increase of 26.8%, while Cottonwood County experienced a decline of 36.7%.
Four of the counties experienced declines in farmland values. The two counties with the largest declines, Cottonwood and Lyon, were those with the largest percentage increases from 2007 to 2008. Assessed values became closer to sale values. Historically, the assessed value would be 75% to 80% of the sales value, but the survey showed the new average for the 14 counties increased to 94.78%. Three counties experienced average sales prices that were less than the average assessed values.
There are several factors that have an impact on land values. Farm income, grain prices, interest rates, return on other investments and 1031 exchanges are often mentioned as reasons for the increase. Farm profits continued to be good in 2009 although down slightly from the year before. In 2008, profits were good, but not at record levels. This trend will probably continue, depending on good corn and soybean yields. Many livestock producers experienced a tough year in 2009, with losses instead of profits due to poor prices for their commodities and high feed costs.
• Farmland prices in southwest Minnesota hit record highs.
• Recent farmland sales showed increases of less than 1%.
• Depending on marketing year, prices may continue to climb.
How high can farmland values go? Supply and demand will decide this. The simple return on investment, which depends on rental rates, will determine how competitive farmland is compared to other investments. If interest rates rise or farm rental rates fall, the value of land is sure to be affected in a negative way. Barring those scenarios, the price of farmland will continue to climb.
If you would like a copy of a two-page document on the trends in farmland sale prices, and you live in one of the 14 counties surveyed, the document is available at no cost at your University of Minnesota Extension county office (contact information for Extension offices can be found at).
If you reside in another county and would like the document sent to you, contact me at 507-372-3906 or.
Bau is an ag business management educator with University of Minnesota Extension.
Add Hay Expo to calendar
The family farm of Matt and Jana Hamlett, Strawberry Point, Iowa, will be the location for the 24th annual Hay Expo, sponsored by Farm Progress magazines The Farmer, Wallaces Farmer and Wisconsin Agriculturist.
The expo, the largest demonstration hay event in the nation, will take place June 16 and 17. The two-day show caters to the large hay grower by showcasing the top manufacturers in the haying industry.
The show site is located off Highway 3, just west of Strawberry Point, Iowa. The expo was held at this location in 2006.
“There are a few things that will be different from the show in 2006. The dates are earlier and will hopefully fall between first and second cuttings to allow more farmers to attend,” says host farmer Matt Hamlett. “Plus, the exhibit field and parking will be in different locations.”
The two-day event showcases mowing, conditioning, baling, hay handling and silage demonstrations on alfalfa and forages. Visitors will be able to compare the various equipment brands operating side by side under actual field conditions.
“For the serious hay producer looking to make the most out of their crop, the Hay Expo is the best possible place to gather information,” says Matt Jungmann, Farm Progress national shows manager.
Exhibits cover 10 acres
A 10-acre exhibit field will highlight displays from the major and shortline specialty manufacturers; seed, building and storage facility suppliers; and a range of related product suppliers. Exhibitors plan to showcase a host of new products aimed at boosting the efficiency and profitability of hay and forage production.
The expo is open from 9 a.m. to 4 p.m. Admission is free. Parking is $7 per vehicle.
For more information, visitor call 866-264-7469.
Minnesotans push for wolf delisting
Dale Lueck, a cattle rancher from Aitkin, and Gerald Tyler, a retired real estate developer from Ely, are moving forward with a lawsuit to force the Department of Interior and U.S. Fish and Wildlife Service to delist the wolves in Minnesota, Wisconsin and Michigan.
On Jan. 15, Lueck and Tyler filed notice of intent to sue Secretary of Interior Kenneth Salazar and three USFWS officials. The agencies have 60 days to respond. Absent a satisfactory response, Lueck and Tyler will seek relief in federal court.
An active member of the Minnesota State Cattlemen’s Association and National Cattlemen’s Beef Association, Lueck was involved in developing Minnesota’s Wolf Management Plan and getting it passed by the state Legislature more than a decade ago.
“It deeply troubles me that as citizens, Mr. Tyler and I are forced to go into court to get our federal government to simply obey the law,” Lueck says. “The wolf is recovered in the Midwest. The USFWS and our state agencies have done an excellent job on recovery.”
The Endangered Species Act says that once a species is recovered, it must be delisted. The wolf was delisted and managed by Minnesota, Wisconsin and Michigan without incident for approximately 18 months in 2007-2008. In the fall of 2008, a federal judge in Washington, D.C., sided with the Humane Society of the United States and placed the Midwest wolves back under ESA protection.
Lueck and Tyler’s complaint zeros in on the fact that the 1992 Eastern Timber Wolf Recovery Plan and ESA recovery criteria for the wolf in the Midwest have been fully met. The plan called for a sustained population of 1,251 to 1,400 wolves in Minnesota and an additional viable population in Wisconsin and Michigan of at least 100 wolves.
Today, about 3,000 to 3,500 timber wolves exist in Minnesota, with about 1,000 more in Wisconsin and Michigan.
Lueck views the current situation as a huge distraction for the USFWS.
“The wolf is recovered,” he says. “We need to move on and give the USFWS agency credit for a job well done. We face real environmental issues that demand action now. Invasive species, both plant and animal, continue to invade our lakes.”
Farmers interested in assisting Lueck and Tyler may call 218-927-2495.
This article published in the March, 2010 edition of THE FARMER.