Land sales finished strong in 2013, spurred by good farmer demand for additional land, according to Farmers National Company, the leading farm and ranch real estate company in the U.S. Farmers National is reporting record real estate sales of $750 million for 2013, compared to $640 million in 2012.
Activity during the first half of 2013 slowed slightly because of a surge in sales at the end of 2012 prompted by tax law changes. However, sales levels turned upward to round out the year and finished strong, according to Randy Dickhut, vice president of real estate operations of Farmers National. He notes that trends indicate an active pace will continue through the first half of 2014 for most regions.
While land prices have stabilized compared to the double-digit price increases seen in recent years, levels are at historic highs. Prices per acre for high-quality land range nationwide from $3,500 to as high as $12,000 to $13,000 per acre in areas of Indiana, Illinois, Iowa and Nebraska. Values in the Upper Midwest are also very strong with sales reaching $10,000 per acre.
“Farms remained profitable in 2013 despite lower commodity prices, in part due to reductions in fertilizer expenses of nearly 30 percent,” said Dickhut. “This is prompting farm owners to continue buying premium land to expand their operations. Interest in average- to medium-quality land has waned, slowing activity for such property.”
A price drop of 40 percent for sugarbeets has impacted land values in the Northern Region (North Dakota/South Dakota/western Minnesota). Income reduction of nearly $350 per acre in some cases is taking some land buyers out of the market. Despite this pressure, values are fairly stable in that area, Dickhut said.
Farmers and ranchers continue to be the primary land buyers. Dickhut reports that investor interest in land has been more guarded, as many are not willing to pay high prices without a guaranteed strong return. Recent success in the stock market is generating interest in alternative investments, pushing outside investors to choices besides land.
“The market for farmland overall remains strong, particularly for quality land, even though buyers are getting more cautious,” said Dickhut. “The impact of changes in commodity prices, expenses, and interest rates will all play into year-end results.”
WASHINGTON — The Fertilizer Institute (TFI) announces its policy advocacy priorities for 2014. Critical areas of focus, as identified by TFI’s executive committee, include nutrients in the environment, safety and security, energy and greenhouse gas emissions as well as transportation. Each issue is of critical importance to the fertilizer industry’s ability to provide farmers with the nutrients necessary to produce food and fiber to a growing population.
“These issues serve as guideposts as we develop and implement strategies for addressing congressional and regulatory challenges,” said TFI president Chris Jahn. “We have already hit the ground running to ensure that the industry speaks with a strong and effective voice in 2014.”
Policy regarding nutrients in the environment is frequently misguided and often ignores the tremendous strides that farmers are making to efficiently use fertilizers. Today, growers are using fertilizer with the greatest efficiency in history. Policy proposals calling for across-the-board nutrient reductions lack a scientific basis and can impede the environmentally and economically sound use of fertilizers.
Several TFI initiatives aimed at protecting workers and communities by maintaining safe and secure operations will continue in 2014. Availability of an online retail compliance assessment tool and promotion of best practices and guidelines for fertilizer storage sale and handling will continue to receive strong support, and the Institute will continue to urge the Department of Homeland Security to finalize its ammonium nitrate security rule.
The potential impact of greenhouse gas emission policies is of utmost concern to the fertilizer industry. With the cost of natural gas comprising between 70 and 90 percent of the cost of producing nitrogen fertilizer, TFI will oppose any policy that encourages fuel switching from coal to natural gas as it could seriously impact the cost and supply of natural gas, and, correspondingly, the domestic production of nitrogen.
The efficient transportation of more than 70 million tons of fertilizer each year is crucial to growers and their ultimate customers, U.S. consumers. The unpredictability of weather often creates a very narrow window for planting, and for this reason, farmers rely upon just-in-time delivery of fertilizer nutrients. As such, threats to the continued rail transportation of anhydrous ammonia or movement of fertilizer on the nation’s river system will be met with a swift response from TFI.