Iowa
Cropland average per acre: $4,310
Cash rent per acre: $165
Flooding across large parts of Iowa this spring will be a positive for farmland values, says Mike Wentzel, a broker with Farmers National Company Real Estate. It's just one more sign that the free market is working as it should.
Wentzel says estimates were that at least 10% of the state's corn and soybean crops were lost in the floods. That means less grain harvested in the fall, which could continue to push up commodity prices.
"And generally speaking, whenever grain prices have risen in the last three to four years, so have land prices," says Wentzel. "I'm getting reports of land in northwest Iowa selling now for $6,000 to $9,000 an acre. That's farmland."
Who are these buyers? Wentzel says about 65% of the sales are to farmers, and about 30% are to investors. Family members round it out.
There is concern investors will be less interested in buying land if there is a change in the capital gains tax rates, something anticipated under the next administration.
But even a change in tax rates won't be enough, says Wentzel, to push farmland prices down.
"We're in a situation where demand is greater than supply," he adds. "When you have that, prices are going to stay strong."
Alabama
Cropland average per acre: $3,900
Cash rent per acre: $41
Highly productive farmland across Alabama continues to improve in price, averaging between $2,900 and $3,500 an acre today, says Dave Milton, head of AlaLandCo, a land and farm brokerage company.
Milton describes the land market across Alabama as being "very nuanced" due to the diversity of the state, as well as downturns in the timber market. He says timberland prices are down about 5% from a year ago. Cropland prices, though, continue to hum, thanks to the strong commodity market.
"We're seeing a lot of land converted to corn and soybean ground," he says. Those acres are coming out of cotton, but also out of highly productive pasture. People are even taking the penalty for moving land out of the Conservation Reserve Program to plant corn and soybeans.
The biggest problem with farmland is finding some for sale. Milton says at press time his company had 30,000 acres of land on the market, and just one tract was highly productive farmland. It was likely going to be purchased by investors who wanted to lease most of it.
"Because our cropland here is more fragmented, we don't see big corporate buyers," he explains. "We're more likely to see mixed-use investors. They will lease some of the land for farming; they will put some into CRP or a wildlife habitat restoration project. Maybe they'll hunt a little."
Texas
Cropland average per acre: $1,640
Cash rent per acre: $55
Land in Texas is as diverse as it gets. But if you want a snapshot of the farmland market west of San Antonio, Jon Mask has plenty to say.
Mask is senior vice president of appraisal services with Capital Farm Credit. The biggest change he's seeing in today's market is less about price and more about who's buying.
"Farmers are in the land market now," he says. "This market was largely driven by speculators just three or four years ago. Now it's pulling in farmer buyers, many looking to add acreage."
While farmland prices vary significantly, Mask says a farm with base water would demand about $2,500 an acre in ag areas where he works. And many of today's buyers have been around long enough to see the ups and the downs of this land market.
"We have people who bought foreclosed land in the 1980s, and now are back in the market. Some are selling unrestricted water rights, then reinvesting in land with base water," Mask says. "Farmers are in this market, and that's something we haven't seen in a while."
*Land prices/cash rents not attributed to a source are from the USDA's most recent survey.