For the fifth consecutive year, Nebraska’s average farmland value increased, reaching $4,015 per acre during the 12 months ending Feb. 1, according to the final report of the University of Nebraska-Lincoln’s 2023-24 Agricultural Real Estate Market Survey.
This is a 5% increase from the previous year and is the highest state property value, excluding inflation, in the history of the survey. Based on 2024 market values, the total estimated value of Nebraska’s farmland and buildings is approximately $179.2 billion.
The final report of the survey was released June 28 by the university’s Center for Agricultural Profitability, based in the Department of Agricultural Economics. It provides point estimates of farmland values and cash rental rates, broken down by region across a variety of land types and classes.
Farm expansion purchases, current livestock prices and 1031 tax exchanges were identified in the report as the primary economic forces driving higher land market values across the state. The number of lands listed for sale and interest in land from non-farmer investors also contributed to the increase in values, according to the survey results.
According to Jim Jansen, an agricultural economist with Nebraska Extension, persistent inflationary pressure from last year has led many farms to consider investing in assets such as land or farm equipment. He co-authored the survey and report with Jeffrey Stokes, a professor in the Department of Agricultural Economics.
“The Federal Reserve’s policies to combat inflation have led to increased borrowing and financing expenses,” Jansen said. “Higher interest rates impact the cost of short-term loans for annual operating loans and long-term purchases such as farm real estate. Rising interest rates could hurt the farm real estate market without additional profitability to offset the increased financing expenses.”
“Market participants have used higher yields on livestock when acquiring different categories of land,” he said, adding that higher long-term interest rates could help moderate Nebraska land values in the future.
The state’s cropland and noncrop prairie lands saw the largest year-over-year changes in value, up 7% and 8%, respectively. Gravity-irrigated land values increased 3%, center-pivot irrigated land values increased 4%, and dryland values increased between 3% and 5%.
The average size of land parcels sold in Nebraska in 2023 was 245 acres, at an average sale price of $4,532 per acre. The highest prices were recorded in the northeast and eastern regions of the state, at $9,341 and $9,723 per acre, respectively. The lowest prices per acre were reported in the northwest and northern regions, at $1,093 and $1,439 per acre.
The survey found that cash rental rates for cropland in the state were down from the previous year, increasing between 3% and 5%. Pasture rental rates increased by about 5% to 10% per acre. Monthly rental rates for cow-calf and ranchers also increased in each of the state’s eight regions.
The Nebraska Farm Real Estate Report is the final product of an annual survey of land professionals, including appraisers, farm and ranch managers, and agricultural bankers. Survey results are broken down by land category and agricultural statistical district. Land values and rental rates presented in the report are averages of survey participant responses by district. Actual land values and rental rates may vary based on parcel quality and the local market in an area. Preliminary land values and rental rates are subject to change as additional surveys are returned.
Read the full report.
