Recently, the final report came out. It has some interesting data that I thought I’d share in this week’s column. One interesting piece of data is the calculation of the return to the land investment. Historically, that return to investment has been around 5.5 to 6%. Recently, including 2011, the return to that land investment for irrigated crop ground is 4.5%. In 2013, the rate of return was 2.8%. For dryland crops return to the land is 2.9%, which is also lower than the historical numbers. (statewide averages). It is obvious that while the dollar return per acre goes up in the recent years, the percentage of return goes down as the value of ground has been going up faster. So this plays into part of that significant change in percentages.
Another interesting set of data pertains to who his buying and selling farmground. The sellers are primarily estates 38% statewide. The buyers are primarily active farmers looking to expand their operation. Statewide, 81% of the buyers are active farmers.
Respondents in the survey were also asked to rate factors that were important for the land values to change (in this case go up). The number one reason is the higher commodity prices, followed by wanting to purchase the land for farm expansion, and the current low interest rates.
You can still request the summarized land value and cash rent data and we will mail to you. Or you can go to the entire report listing the historical data that I’ve referenced for this column by going to: http://agecon.unl.edu/
For more information or assistance, please contact Allan Vyhnalek, Extension Educator, University of Nebraska-Lincoln, Extension in Platte County. Phone: 402-563-4901 or e-mail AVYHNALEK2@unl.edu