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Farmland Prices Continue to Rise Across Nebraska
Nebraska Ag Connection - 03/22/2023

Prices for Nebraska farmland have continued to increase, reaching their highest price ever this year.

Average prices for ag land were $3,835 per acre as of Feb. 1, up 14% in the past year, according to the University of Nebraska–Lincoln’s 2023 Nebraska Farm Real Estate Market Survey preliminary report.

That amount is the highest non-inflation-adjusted statewide land value in the 45-year history of the survey, while the increase is the second-largest since 2014.

The report is in line with one released earlier this year by Farm Credit Services of America, which showed prices rose 14.3% in 2022 compared with 2021.

The report attributed the rise in values to a number of factors, including higher commodity prices, purchases for operation expansion, favorable financial situations for current owners and an increase in buyers acquiring land as a hedge against inflation.

Jim Jansen, an agricultural economist who co-authored the survey and report, said many farmers and investors took advantage of low interest rates in the first half of 2022, but now that rates are on the rise, it could affect demand for farmland.

“Monetary policy in 2022 created a dynamic period as the Federal Reserve raised interest rates to combat inflation,” Jansen said in a news release. “Interest expenses for land loans gradually rose over the prior year and into 2023 as the Federal Reserve continues policies to decrease inflation.”

Both the Farm Credit Services report and one from the Federal Reserve Bank of Kansas City showed that prices were already starting to slow down in the second half of 2022.

The highest land prices continue to be in the eastern part of the state, with the area that includes Lancaster County having the highest price, at $9,320 an acre on average. The highest increase, 17%, occurred in the southeastern corner of the state.

Despite severe drought conditions over much of the state, non-irrigated land tended to increase more in value than irrigated land.

Dryland cropland with irrigation potential rose 16% while land growing hay rose 17% and non-tillable grazing land rose 15%. By contrast, center pivot-irrigated cropland rose 13% while gravity-irrigated cropland rose 12%.


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