by Ryan Evans | Center for Agricultural Profitability
Lincoln, Neb. —For the fifth consecutive year, the average all-land value of agricultural land in Nebraska increased, reaching $4,015 per acre in the 12-month period ending Feb. 1, 2024, according to the final report from the University of Nebraska–Lincoln’s 2023-2024 Farm Real Estate Market Survey.
This marks a 5% increase over the prior year and is the highest non-inflation-adjusted statewide land value in the history of the survey. Based on 2024 market values, Nebraska's estimated total value of agricultural land and buildings rose to approximately $179.2 billion.
The survey’s final report was published June 28 by the university’s Center for Agricultural Profitability, which is based in the Department of Agricultural Economics. It provides current point-in-time estimates of agricultural land values and cash rental rates, broken down regionally across a variety of land types and classes.
Purchases for farm expansion, current livestock prices, and 1031 tax exchanges were identified in the report as the major economic forces that guided the higher market value of land across the state. According to survey results, the amount of land offerings for sale and non-farmer investor interest in land also contributed to higher values.
Inflation pressure continuing from the prior year led many operations to consider investing in assets like land or agricultural equipment, according to Jim Jansen, an agricultural economist with Nebraska Extension. He co-authored the survey and report with Jeffrey Stokes, a professor in the Department of Agricultural Economics.
“Federal Reserve policies to combat inflation have increased borrowing and financing expenses. Higher interest rates influence the cost of short-term lending for annual operating loans and long-term purchases such as farm real estate,” Jansen said. “Rising interest rates might affect the agricultural real estate market without additional profitability to offset the increasing financing expenses.”
“Market participants utilized higher returns on livestock when acquiring different grades of land,” he said, adding that higher long-term interest rates may help moderate Nebraska land values in the future.
Grassland tillable and non-tillable land across the state experienced the highest one-year changes in value, up 7% and 8%, respectively. The value of gravity-irrigated cropland rose by 3%, center pivot-irrigated cropland gained 4%, and the statewide value of dryland cropland rose 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 in the northeast and eastern parts of the state, at $9,341 and $9,723 per acre. The lowest prices per acre were reported in the northwest and north regions, at $1,093 and $1,439 per acre, respectively.
The survey found that cash rental rates for cropland in the state were moderating compared to the prior year, rising between 3% and 5%. Pasture rental rates increased between about 5% and 10% per acre. Cow-calf and stocker monthly rental rates also increased in each of the state’s eight regional districts.
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. Results from the survey are divided by land class and agricultural statistic district. Land values and rental rates presented in the report are averages of survey participants’ responses by district. Actual land values and rental rates may vary depending on the quality of the parcel and local market for an area. Preliminary land values and rental rates are subject to change as additional surveys are returned.
The full report is available on the Center for Agricultural Profitability’s website, https://cap.unl.edu/realeaste.