Farmland Values Strengthen, Possibility of Tax Changes Loom

The fall of 2020 saw a trifecta of factors lead to increasing interest for farmers to buy farmland.

“Government payments, low interest rates, and rising grain prices combined in higher land sales,” says Randy Dickhut, senior vice president of real estate operations at Farmers National Company. “And that optimism we saw start to surface this fall continues into the new year.”

Dickhut notes his company had sales in Iowa and Illinois that topped $13,000 per acre. 

"This is indicative of farmer interest and individual investor interest. We are starting to see prices we last saw between 2012 and 2014,” Dickhut says. 

In the final three months of 2020, Farmers National saw a 35% increase in the volume of land sold compared to the end of 2019. 

“Generally, we have had less land for sale. People still see a 2 to 3% return and want to hang on to it,” Dickhut says. 

Heading into 2021, he expects for land values to continue to show strength. And demand for high quality and average quality farmland to firm. But there are many unknowns, including any changes to the tax structure. 

“People think there were a few sales that got pushed into 2020 before any potential changes to the estate tax,” Dickhut says. 

Hear more from Dickhut in this interview from AgriTalk: