2015 Nebraska Farmland Values and Rental Prices

The University of Nebraska – Lincoln’s Cornhusker Economics has recently published their review of the 2015 trends in Nebraska farmland values and rental rates.

For the first time in recent years, overall Nebraska farmland values decreased by approximately 3%, or a valuation of $3,210 per acre.  More specifically, the statewide numbers show:

  • Dryland cropland with irrigation potential declined the most, at 10%, for a valuation of $4,740 per acre
  • Dryland cropland with no irrigation potential declined 9%, for a valuation of $3,385 per acre
  • Gravity irrigated cropland decreased 4%, for a valuation of $7,005
  • Center pivot irrigated cropland decreased 2%, for a valuation of $7,495

Unsurprisingly, pastures and cow-calf pair rental rates increased about 15% across the state due to higher cattle prices and drought assistance via the Livestock Forage Disaster Program.  Interestingly:

  • The big mover is hayland, up 20%, for a valuation of $2,350
  • Tillable grazing land is up 7%, for a valuation of $1,490 per acre
  • Nontillable grazing land is up 12%, for a valuation of $970 per acre

Rental rates reflect the above changes in valuation.  Cropland rental rates are down across the state, with two exceptions: dryland cropland in central Nebraska (increase of 5%) and center pivot cropland in northeast Nebraska (increase of 1%).  Pasture rental rates are up, ranigng from $85 in the northeast to $11 in the northwest.  Both central and southwest Nebraska are up 34% ($40 and $27 respectively).

Rental rates for cow-calf pairs tracks the grazing land numbers.  Average dollar per pair is $60, up 40%.

More information is available in the article but, all things considered, the valuation decrease does not erase the gains made in previous years.  Moreover, the increase in the cattle market is directly responsible for the increase in pasture and cow-calf pairs.

If you have further questions, you are welcome to contact us!

Land access for small farmers

This interview with Temple Grandin on her thoughts on the future of small farms is very intriguing.  Land access is certainly a pressing concern for small farmers, as well as beginning farmers.  It got me thinking about various methods of obtaining land access for small farmers.  What are some ideas for obtaining land access, especially if you need or want access to a population center:

  • Ownership of land

This is the obvious, albeit for many people the most difficult solution to obtaining land access.  But not all is lost.  It takes persistence, networking, and workable finances, but it is possible to purchase land.  There are many programs available from both the Farm Service Agency and individual states (for example, aggie bonds) to assist with land purchases.  Additionally, small farmers have a built-in advantage: they don’t need or require enormous tracts of land.  So, keep an eye out for smaller tracts of land that may be a bit off the beaten path.  Talk to anyone who will listen (or at least won’t walk away!) that you are looking for land to purchase.  Look for land that, while it may not be perfect, will nonetheless fit your needs.

  • Lease of land

As I’ve written here before, I think leases are an option if properly considered.  A lease, especially if you are a new small farmer, provides an opportunity to test your business plan, your marketing and product, and whether this is a career you can and want to pursue.  Leases also provide an opportunity to develop a relationship with a landowner who may be willing to sell land and/or provide references to others in the community about your operation and need for land.  Also, keep in mind that the State of Nebraska has a program in place when leases are signed: the Nebraska Beginning Farmer Tax Credit.  Keep in mind the tax credit requires a lease of ten or more acres.

  • Urban lots

Urban lots may be exactly what your small farm needs.  You would be in the population center, would likely have direct contact with consumers, and may have more housing options available.  But there are issues unique to urban areas.  First, you need to know the zoning regulations and the zoning of the particular lot you may use for your operation.  You may also have to consider whether homeowner covenants are in place.  Some covenants prevent gardens, commercial activities, and/or require a house to be built on the lot within a certain period of time.  An urban lot is also best for vegetable, fruit, or similar operation; animals will very likely not work due to municipal ordinances barring farm animals in city limits.

In the end, access to land is a difficult but not necessarily insurmountable problem, especially for small farmers.  So don’t give up on making your business plans, networking with others, participating an apprenticeships and internships, and generally following your dream.  And if following your dream requires a bit of help, you are always welcome to contact us.