UNL survey shows property values ​​in Nebraska increased by 5%

Danielle Evans

UNL Institute of Agriculture and Natural Resources

Lincoln, Nebraska – The average total value of farmland in Nebraska increased for the fifth consecutive year, reaching $4,015 per acre for the 12-month period ending February 1, 2024, according to the University of Nebraska-Lincoln’s 2023-2024 Farm Real Estate Market Survey final report.

This represents a 5% increase from the previous year and is the highest non-inflation-adjusted statewide land value in the survey’s history. Based on 2024 market values, the total estimated value of farmland and buildings in Nebraska increased to about $179.2 billion.

The study’s final report was released on June 28 by the university’s Center for Agricultural Profitability, part of the Department of Agricultural Economics. It provides current estimates of agricultural land values ​​and rental prices, broken down by region and different land types and classes.

Purchases to expand farm operations, current livestock prices and 1031 tax exchanges were identified in the report as the main economic forces driving the higher market value of land across the state. The amount of land available for sale and interest in land from non-farm investors also contributed to higher values, according to the survey results.

Continued inflationary pressures from the previous year prompted many farms to consider investing in assets such as land or farm equipment, said Jim Jansen, agricultural economist with Nebraska Extension, who co-authored the survey and report with Jeffrey Stokes, professor in the Department of Agricultural Economics.

“The Federal Reserve’s actions to combat inflation have increased borrowing and financing costs. Higher interest rates affect the cost of short-term borrowing for annual operating loans and long-term purchases such as farm real estate,” Jansen said. “Rising interest rates could hurt the farm real estate market if additional profitability does not offset rising financing costs.”

“Market participants took advantage of higher returns from livestock holdings to purchase different qualities of land,” he said, adding that higher long-term interest rates could contribute to a modest increase in land prices in Nebraska in the future.

The largest year-over-year changes in value statewide were for tillable and non-tillable grassland, which increased by 7% and 8%, respectively. Gravity-irrigated cropland values ​​increased by 3%, pivot-irrigated cropland values ​​increased by 4%, and statewide dryland cropland values ​​increased by 3% to 5%.

The average size of land sold in Nebraska in 2023 was 245 acres, at an average sales price of $4,532 per acre. The highest prices were recorded in the northeast and east of the state at $9,341 and $9,723 per acre, respectively. The lowest prices per acre were recorded in the northwest and north at $1,093 and $1,439 per acre, respectively.

The survey found that farmland rental rates in the state moderated from a year ago, rising 3 to 5 percent. Pasture rental rates rose about 5 to 10 percent per acre. Monthly rental rates for cows, calves and feedlots 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. The survey results are broken down by land class and agricultural statistical district. The land values ​​and rental rates reported in the report are averages of survey respondents’ responses by district. Actual land values ​​and rental rates may vary depending on the quality of the land and the local market for an area. Preliminary land values ​​and rental rates may change as more surveys are returned.

The full report is available on the Center for Agricultural Profitability website: https://cap.unl.edu/realeaste.