The average market value for agricultural land in Nebraska increased 16 percent over the past year according to preliminary numbers released by the University of Nebraska Agricultural Economics Department. The increase is the largest since 2014 and this year’s average land value, $3,360 per acre, is the highest in the history of the survey, exceeding the previous high in 2014 of $3,315 per acre (Figure 1). The figures come from the department’s annual survey of land appraisers, farm and ranch managers, agricultural bankers, and other real estate professionals.
Survey responses indicated that market values for dryland cropland rose between 15-19 percent, irrigated cropland values increased 17 percent, and grazing land perked up 10-12 percent. Eastern Nebraska had the largest increases in average values ranging from 16-21 percent (Figure 2). Respondents said rental rates were also higher with cropland rates up 10-15 percent and pasture rates up 6-8 percent. Participants reported improved crop prices, low interest rates, and a renewed use of 1031 exchanges helped boost land prices.
Interestingly, the increases reported by the UNL Survey are less than those reported by the Federal Reserve Bank of Kansas City in its survey of commercial bankers during the fourth quarter of last year. The Federal Reserve reported the average value for non-irrigated land in Nebraska was 31 percent higher compared to the prior year, irrigated land value was 21 percent higher, and ranchland value was up 23 percent. In either case, both the UNL survey and Federal Reserve Bank survey show land values have experienced marked increases over the past year. More on the UNL report, authored by Jim Jansen, an agricultural economists with Nebraska Extension, and Jeffrey Stokes, a professor in the Department of Agricultural Economics, can be found at: https://agecon.unl.edu/NEFmRealEstate_2022-Final%20%28002%29.pdf
Figure 1. Nebraska Average Land Value 1979-2022
Figure 2. Average Land Values & Percentage Changes from 2020