American Society of Farm Managers and Rural Appraisers

Farmland Value Check: Midwest Class A Ground Sees Pullback, Water Security Redefines California’s Market

Mon, 04 May 2026 03:08:15 GMT

New data assembled by Realtors Land Institute (RLI), the National Association of Realtors Research Group and Acres, highlights fundamental trends driving the land market today. But this year’s Land Market Survey, which was augmented by research conducted by Acres, unveils two trends in farmland regarding quality and productivity ratings as well as other trends important in the business management of farmland.

First, Overall Land Trends

In addressing widespread concerns about a potential U.S. recession, Dr. Lawrence Yun Chief Economist and SVP of Research, National Association of Realtors emphasized that, despite recent oil price shocks and persistently low consumer sentiment, the U.S. economy is not on the brink of recession.

The survey details multiple industries and sectors in land use and values, and for 2025, In terms of price growth, the ranch category led with a 2.2% increase in dollars per acre, outperforming other land types. Industrial and recreational land also saw solid gains of 1.9% each, while other categories experienced moderate increases. Notably, Commercial Real Estate Data Analyst, Oleh Sorokin anticipates that while land sales will strengthen in 2026, the pace of price growth is expected to slow, with projected increases in the ranch category dropping to 0.9% per acre.

How Are Farmland Values Performing Differently?

The presenters highlight the energy price correlation as Farmland values and operational balance sheets are heavily tied to energy prices, as oil and gas drive both fuel costs and fertilizer prices.

“Tariffs are one that it’s kind of dwarfed now by the energy situation, but tariffs were a pretty big impact last year,” says Aaron Shew, chief technology officer at Acres.

With fuel input prices and fertilizer input prices highly driven by energy prices, those effects are being monitored closely both in terms of price hikes but also duration of elevated prices.

He continues, “Some of the energy challenges that we’re undergoing with the war in Iran and the blockade, Straits of Hormuz, I think that has the potential, maybe less in the broader real estate market, but for farmland specifically, that could have a pretty large impact, depending on how it resolves, how quickly that happens.”

What Are The High Interest Trends?

Shew’s research reveals two eye-catching farmland value takeaways.

1. Midwest Market “Pullback": Class A farmland in the Midwest is seeing a “mature” pullback of about 10% from the 2021–2022 peaks, while Class B ground remains slightly more resilient.

(Acres.com)

First Shew notes, 2021 and 2022 saw 1.5x to 2x the average number of land transactions. The highest value per acres sales during that time earned a lot of attention. What he refers to as “hype.”

“Particularly in Iowa and Illinois, where farmers were buying farms for $25,000 or $30,000 per acre. you have these outlier transactions. It’s very, very few, but they catch a lot of attention and that kind of pushes some land values up.”

He says that raised expectations that Class A—or the highest rated productivity ground—had reached a new plateau in values and wouldn’t go down.

But Shew notes, as of 2025, there’s been a 10% pullback from those ’21 and ’22 peaks. And that’s on the highest rated ground in terms of productivity.

Class B ground values have been more resilient.

2. In California, Water is Half Your Land’s Value

Looking at the data, Shew says in California, water security drives the value, particularly for permanent crops. Tier 1 districts with multiple water sources maintain high values, while “white space” (areas without district water) is seeing significant distress and land fallowing.

“A lot of people are already talking about water regulations, how water security plays a role, and, permanent crops have been under duress for close to three years now,” Shew says. “So that’s not new, but we’ve quantified the impacts regionally, and across ag districts, and by permanent crop type.”

The crops showing this trend in spades: almonds and pistachios.

“For Tier 1 districts, for almonds, you’re looking at $30,000 plus an acre. And then you go to Tier 2 districts, and you’ll see it around a little over $20,000 an acre. Outside of districts, it’s called white space and you’re actually at $13,000 per acre, which is almond ground being sold as bare ground—rip and replace.”

(Acres.com)

He says Sustainable Groundwater Management Act (SGMA) will mean that 500,000 to 750,000 acres of irrigated farmland will have to be fallowed or pulled out by 2040.

“So that’s about 10% of the farmland in California’s Central Valley, most of it in San Joaquin,” so we’re seeing some initial phases of that as we’ve seen tens of thousands of permanent crops come out in the past few years,” Shew says.

He adds, “Water regulatory bodies have put more pressure on farming in California. It’s just going to create a harsher environment for how water gets distributed and allocated.”

Resilience via Government Assistance

Programs such as the Farmers Bridge Assistance are preventing forced land sales by supporting farm operations, which keeps land values stable despite two years of challenging economics. He says we are reaching the tipping point in year three.

“Farm operations can be poor for a year or two and you’re not really going to see it show up in land values,” he says. “But we’re on a third year of this, and we’ve got other challenges that are fairly unprecedent at the same time, so there’s a lot to watch.”

“If you have to declare bankruptcy on your farm, 80% of most farm balance sheets is land, so that’s the large asset that’s going to get sold by the bank,” Shew says. “Government policies to provide support, The Farmers Bridge Assistance is the most recent one that probably plays the largest role, and it just helps farmers get to the end of ‘26, where hopefully balance sheets are in a good place.”

He’s also watching how the provisions in the One Big Beautiful Bill come to bear this fall and at year end.

“Reference prices for, rice, in particular, is one that comes to mind. Those will take place and hopefully create some stability, but you have got to get to the end of the year.”

Transaction Volume Stabilization

Nationwide transaction volumes have returned to pre-pandemic (2018–2020) levels, though California is seeing an uptick in volume due to “distress sales” from owners who can no longer float the costs.

“The low interest rates ‘21 to 23, roughly created a great time for folks to invest in land. They wanted to deploy capital, and land is the definition of a real asset,” he says. “You had that boom, and then, of course, as rates went up in ’23 and ’24 and values stabilized at much higher levels, it turned off that capital allocation.”

(Acres.com)

National farmland transaction volumes in 2024 and 2025—transaction count, acreage turnover, and overall volume of dollars—is approximately the same as 2018 and 2020.

“Q4 of ‘21 and Q1 of ‘22, we saw three times the typical amount that would turn over,” he says. “So in Q4 of 2021, we saw 10 billion in farmland in one quarter—high volume and high values.”

While 2021 was the big, from a year-over-year standpoint, that began to fall back, by 20%, then 30%. He says the flattening from 2024 to 2025 is a bright spot to show overall stability.

“We’re not going to continue to see less transactions or lower sales volumes. We’re seeing that stabilize at a more consistent level alongside where interest rates are,” he says. “And presumably, if we see interest rates decrease, we will see that pick back up, and start what may be another cycle.”

You can download the full Market Values Report here.

Iowa Farmland Values Rise 1.3% As Market Shows “A Little Bit Of Optimism”

Wed, 11 Mar 2026 18:51:49 GMT

In its spring survey of farm managers, real estate agents, and bankers, the Iowa Realtors Land Institute reports a slight trend upward in farmland values.

Market Appears to Be Firm

“Across the nine crop reporting districts, from September 1 to March 1, statewide values were up 1.3% so finally we’re seeing a little bit of optimism in land market,” says survey coordinator Matt Vegter of Hertz Farm Management “It’s a pretty flat market year over year, but at least a little bit more optimism here in the last six months.”

Vegter adds he was surprised all districts were up, and he notes eastern Iowa was higher than central or western Iowa.

Buyers Seek Quality

Over the past year, this group’s research has shown Iowa farmland with a 0.1% net gain.

The highest values for high quality crop land acres are:

Northwest: $15,297
East central: $14,824
Northeast: $14,446

The most recent study from the Chicago Federal Reserve pegged a 5% increase in “good” Iowa farmland from October 1, 2025 to January 1, 2026.

Slight Uptick in Values Despite Market Headwinds

Respondents say the top three factors influencing the land market are commodity prices, supply of land, and interest rates—in that order. Despite tough profitability in commodity production, the survey points to limited inventory continuing to support land values.

More than 70% of respondents say the volume of land for sale is similar to 10% less than one year ago. Whereas only 12% say more land is available today than 12 months ago.

The survey coordinators point to the announced government payments providing additional support.

“Motivated buyers are still active and well-priced farms are still moving. We’re seeing that from both producers looking to expand and investors who continue to view farmland as a reliable long-term asset,” Rebecca Frantz of Hertz Farm Management says. “Inventory has been tighter, and we don’t expect that to change dramatically in the near term. When sellers do bring quality land to the market, there are still buyers ready to act. That balance is what’s keeping the market on solid footing.”

Not surprisingly, since September Iowa pasture values increased 2.6% over the past six months thanks to steady cattle prices. Also of note, timber and recreational land values rose 2.2%.

What’s In Store for Iowa Farmland Values?

As for a farmland values outlook, 70% of survey participants responded they expect land values to increase 0–10% over the next five years, and 5% expect lower values in five years.
And regarding who is buying land, the survey reports 67% of buyers are farmers or farmers with 1031 funds.

How Trump’s Bridge Payments Could Affect Farmland Prices

Wed, 10 Dec 2025 18:11:56 GMT

Farmers National Company president Paul Schadegg sees the recently announced $12 billion in bridge payments to farmers having a variety of effects on the ag economy.

“They think it’ll be a shot of adrenaline to the ag economy,” he says on “AgriTalk.” “There are some people who say they’ll use it to pay down debt or use for operating cash. Some need a new combine or tractor, and it might go toward that. And subsequently, it could add to the cash a buyer has in their pocket that they can deploy toward a land purchase, so it’s going to cover a broad spectrum.”

The bridge payment announcement coincides with the busiest time of year with higher volumes of land sales.

“It’s really active this time of year. We see a lot of land sales between October and March. We’re in the thick of it now,” Schadegg says. “The pipeline is full as we get into January and February for land sales.”

Steve Breuere from Peoples Company tells Paul Neiffer on the “Top Producer Podcast” about 40% of their land sales volume happens in the fourth quarter of the year.

Before the bridge payment announcement, Farmers National released their 2026 Farm Input Outlook. According to that report, input costs are projected to increase slightly compared to last year. Fertilizer prices are the biggest driver, most notably nitrogen. There will be modest increases in chemicals, financing costs, equipment and labor. Categories showing flat to small increases include seed, fuel and land.

Specific to cash rent, Schadegg calls out farmland in Colorado, western Nebraska and southwestern Kansas for illustrating elevated pressure on those rates because of increased input costs. However, more central areas of the country Iowa, the Dakotas and Minnesota aren’t as pressured.

Peoples Company Boosts Farmland Holdings with Strategic Acquisition of Murray Wise Associates

Thu, 23 Oct 2025 15:58:06 GMT

Peoples Company continues a series of acquisitions to expand its land brokerage, appraisal, farm management, and capital markets services. Today, the company announced its latest acquisition: Murray Wise Associates, LLC, which is scheduled to close on Nov. 15, 2025. In recent years, Peoples Company acquired two other Illinois-based firms, Land Pro LLC and The Atkins Group.

“Murray Wise Associates has long been recognized as a trusted name in farmland auctions and brokerage,” Steve Bruere, President of Peoples Company said in the company’s announcement. “This acquisition not only strengthens our presence in key agricultural markets but also reflects a broader shift in the industry toward leveraging specialized farm management expertise. We’re excited to welcome the Murray Wise team and to continue delivering exceptional value to landowners and investors.”

Founded by Murray Wise 25 years ago, Murray Wise Associates has completed more than $5 billion in value of land and agribusiness transactions across 20 states. Its nine team members will transition to the Peoples Company team. In November 2021, Farmland Partners acquires Murray Wise Associates.

“Joining forces with Peoples Company creates tremendous opportunities for our clients and team,” Eric Sarff, President of Murray Wise Associates and whose new title will be Peoples Company vice president, said in the company’s announcement. “Peoples Company’s national reach and comprehensive service platform will allow us to deliver even greater value while continuing to provide the personalized service our clients expect.”

The company leaders say this acquisition highlights the trend of partnering institutional and asset management firms with specialized farm management companies. The projected goal is to provide operational efficiency and enhance returns.

“MWA has a talented team that has partnered closely with farmers and clients across the country to grow FPI’s management portfolio over the past four years,” said Farmland Partners President and CEO Luca Fabbri. “I’m thrilled that they will be able to continue their growth under the Peoples Company umbrella. Peoples is a leading farm management firm with a cutting-edge proprietary technology platform, and we look forward to working closely with them in the future.”

In Today’s Ag Economy, What’s Supporting Land Values?

Mon, 23 Jun 2025 20:29:13 GMT

When looking at the data from 2024 and 2025 so far, Doug Hensley, president of Hertz Farm Management, says keeping perspective is important.

“Coming out of the 2020 through 2023 growing seasons, agriculture in general was probably in its strongest financial footing that it has ever been in, or at least in the last 50 years,” Hensley says.

He says 2024’s farmer income was kept afloat by the ECAP payments along with stronger markets in January and February in the early months of this year.

“A lot of people had a little bit of profit and are fighting to see another day, and out in the countryside right now, it’s not a perfect crop everywhere, but holy buckets, I mean it’s going to be a big crop, if we finish this thing,” Hensley says.

Hensley will be watching crop conditions through pollination — particularly in the next three weeks.

Uncertainty Tampers Land Available For Sale

Hensley says this past fall, land values dipped with lower commodity prices, higher interest rates, and higher input prices challenging profitability.

“With the early ‘25 rallying commodity prices and the ECAP payments really supporting cash flow out in the countryside, we actually saw a little bump in the land market this spring,” he says. “This I would attribute to the fact that very few farms have sold.”

Regarding the lower availability of farmland for sale, Hensley says it can be attributed to human behavior.

“Anytime you get one of these geopolitical environments where there’s lots of things going, tariffs, and just the transition to the new Trump administration, it unsettled a lot of things,” he says. “And when there’s lots of uncertainties, people have a tendency, especially with big assets, just to hold off on making decisions. That’s what actually supported the land market.”

(Chicago Federal Reserve Bank)

According to the Chicago Federal Reserve Bank’s survey of farm lenders, farmland values across the “I” states remained steady compared to the previous year. However, those values were supported by lack of supply — not stronger demand. Farmland available for sale and the actual sales (by farm number and by acreage) were all lower in Q1 2025 compared to 2024.

Peoples Company tracked and reported on 28 tracts (2,007 acres) sold at public auction in Iowa in May 2025. The price was $9,289 per acre, and calculated just for tillable acres the average price was $11,895 per acre and the average per CSR2 was $160.

(Peoples Company)

What About Land Available for Sale Through the End of the Year?

Hensley says going forward, sellers might make more land available on the market.

“I think we’re going to see volume in the land market increase, probably every month from now through harvest,” Hensley says. “So it’ll be an interesting harvest season and end of summer, but right now I think the land market looks pretty good.”

Randy Dickhut with Ag Economic Insights is watching the share of farmland purchases financed by debt. He reports an increasing share using debt for purchase, mostly notable in Indiana but also Iowa and Illinois showing an increase as well.

(Acres.com and AEI.ag )

“This isn’t surprising given strong farmland values and sluggish farm income, especially for corn and soybean producers,” he says.

Dickhut breaks down the commonly referenced statistic that 85% of farmland is debt-free, and he highlights how now that number is closer to 80% in Iowa at a statewide level. The level of debt-free farmland varies across the five state he analyzed, Iowa, Illinois, Indiana, Ohio, and Minnesota, where an average of 27% of farmland sales between 2021 and 2024 reported a lien.

His analysis underscores how land and debt are critical parts of the farmer’s balance sheet as real estate accounts for 84% of farm assets and 67% of all farm debt.

“However, farm incomes have been quite volatile over the last few years,” Dickhut says. “As such, it stands to reason that debt might be more common in 2024 than in 2021 or 2022.”

And from his analysis, across Indiana, Illinois and Iowa, the share of land sales using a loan was higher in 2024 than any other earlier year reported.

From the Chicago Federal Reserve ag banker survey, other results included:

69% of the surveyed bankers expect farmland prices to be unchanged in the second quarter of 2025
Annual cash rents declined across the district for the first time since 2020
This year, average annual cast rents dropped 3% in Iowa, dropped 2% in Illinois and went up 1% in Indiana
No banker in the survey observed higher rates of loan repayment in the first quarter, compared to Q1 2024
39% reported lower rates of repayment by their farm customers
On average, 19% of their farm borrowers (still a small percentage) had more carryover debt from last year’s crop carried over into the new growing season, compared to the amount of carryover debt one year ago

Iowa Farmland Holds Strong: Discover the Factors Behind Six Months of Consistency

Thu, 27 Mar 2025 11:35:00 GMT

The Iowa chapter of the Realtors Land Institute conducts a twice a year survey to show trends in the state’s farmland values. The latest survey was sent out on March 1, and committee co-chairs Rebecca Frantz and Matt Vegter say the results show “a stable market.”

Whereas from March 2024 to September 2024, respondents said the value were down 5%, this year’s March survey shows values more steady at dropping just 1%. Comparing March 2024 to March 2025, the Iowa farmland market is down 6%.

The survey asks for opinions on the current status of Iowa’s farmland market.
Vegeter highlights the early March time frame as weighing on respondents with uncertainty around tariffs, however, overall greater optimism since September due to strong harvest results and improved commodity prices.

“This is stable compared to how bearish the results were in September,” he says.
Across the nine reporting districts, only the southcentral district was slightly positive at up 0.2% since September. The other districts ranged from -2.1% to -0.1%.

In September, all districts were down from the previous March with ranges from -3.6% to -5.8%.

As for what’s driving the value of farmland, Frantz says the factors are similar from September 2024 until March 2025. In order, the respondents rank them: commodity prices, interest rates, supply of land, general economic inflation, and government support.

Regarding return on crop land, Frantz says respondents say 2 to 3% return is expected.
She highlights a tight supply of ground is adding to the steady values. More than one-third of respondents say 6 to 10% less land is coming to market than one year ago. Only 28% says it’s a similar amount.

Pasture acres showed stability. And Vegter notes a surprising strength in timber/non-tillable acres.

“Eight out of nine crop reporting districts showed an increase in values for non-tillable/timber acres, so there’s certainly a demand for recreational properties out there. Despite all the uncertainty through the fall, through the presidential election and in and the last few months, folks are still looking for rec ground,” he says.

Farmland Meets Cryptocurrency: 4 Emerging Investment Trends

Fri, 21 Mar 2025 17:30:40 GMT

The past 15 years have brought two developments that have changed the dynamic for farmland investment. The financial crisis of 2008 gave a renewed focus for institutional investment in farmland as an alternative asset. Coincidentally, bitcoin, the first cryptocurrency, was founded around the same time in 2009.

Here are four key ways the two assets compare.

1. They are both rare.

As Steve Bruere from Peoples Company points out, only 1% to 2% of farmland turns over each year.

“I always tell people there are two types of people in the world. People who own farmland; and people who wish they did,” Bruere says.

Mike Rohlfsen is a consultant who co-founded Agris Academy to help farmers think differently about grain marketing, and as a fan of cryptocurrency himself, he also regularly gives presentations explaining the opportunities with cryptocurrency.

“For example, you can think of bitcoin like digital gold because it has natural scarcity. There will never be more than 21 million bitcoins,” Rohlfsen says.

2. The two investments are on different ends of the risk spectrum.

Bruere says for investors, owning farmland provides an asset positively correlated with inflation. As inflation goes up, so do farmland values. And farmland values are negatively correlated with public equities.

He says cryptocurrency, such as bitcoin, and farmland as alternative investments are complementary—not competitive. While cryptocurrencies are still perceived as a higher risk, farmland carries a long-standing performance curve.

“They used to compare farmland with gold, but it was said it was gold with a coupon because it had a dividend yield,” Bruere says. “Now, crypto is the modern gold, but you can call farmland crypto with a coupon because it allows investors to store wealth, be inflation-protected and have an annual cash yield, which you don’t get from crypto or gold.”

Bruere also believes as the interest in the general crypto market increases, it broadens the overall pool of investors who are thinking about alternative assets.

“Cryptocurrency may increase interest in farmland,” he says.

3. Tokenization.

The cryptocurrency market has different platforms, such as Solana and Ethereum, that enable tokenization — using a fractional ownership structure on the blockchain.

“The concept where you can buy fractional pieces of a bitcoin can also apply to farmland,” Bruere says. “It would cost $3.2 million for 160 acres at $20,000 per acre. Fractionalizing that in a way with crypto opens up a new way we are able to think about farmland ownership.”

Rohlfsen says as farmland ownership interest increases, it could help to satisfy an increasing appetite for the asset without an increase in supply by providing greater access to investors at smaller, more affordable parcels.

“You’ve seen it play out in fine art where someone purchases 1/1,000 of an art piece through tokenization. And it’s gotten traction,” Rohlfsen says. “If you broke up a 160-acre parcel, you could allow someone to buy it 1 acre at a time.”

4. The time for transformation coincides with a generational change and a technology advancement.

“We are entering a time where there will be a massive wealth transfer from baby boomers who are looking for alternative investments and ways to allocate capital,” Bruere says. “That demographic shift of where the wealth is will mean more interest in alternative investments.”

The shift of where that wealth is being held, who is holding it and with what expectations is happening in parallel with the blockchain and cryptocurrency technology.

“What this leads to is disintermediation. Blockchain allows anyone to transact freely and openly, and consensually without a lawyer, bank or middle layer. We can expect the increased digitization of anything transactional,” Rohlfsen says.

How Colorado Eliminated Feral Hogs

Thu, 26 Sep 2024 21:24:47 GMT

Feral hogs devastate nearly everything in their path. They eat just about anything they can catch and destroy the environment. To make it worse, they spread disease to domestic pigs, other wildlife and even humans. Once feral pigs start reproducing, they are nearly impossible to eliminate. It’s no wonder Colorado is making headlines across the country. It’s the first state to announce it has successfully eradicated its feral hog population.

“As far as I know, Colorado is the only state that has announced that it has eradicated all feral pigs,” says Travis Black, deputy regional manager for the Southeast Region for Colorado Parks and Wildlife (CPW).

More famously known in the state as the “feral pig expert,” Black says this day has been a long time coming.

When did feral pigs become a problem in Colorado?
In 2001, Black was serving as a field officer and noted about 250 feral swine at Big Sandy Creek on the eastern edge of the state. Colorado also had one other primary population of 100 feral pigs in the extreme southeast corner of the state, near the Cimeron River.

Over the next few years, field officers began noting isolated pockets of feral swine.

“There’s no doubt those pigs were illegally brought into that state,” Black says. “Some were in captivity in a farm or field. The farmers didn’t know any better, they bought them somewhere else and brought them on to their property.”

It wasn’t until 2005 that CPW partnered with the Colorado Department of Agriculture, USDA Wildlife Services and the U.S. Forest Service to begin addressing feral pig problems in the state. They developed a memo of understanding (MOU) specifying how the organizations would work cooperatively to get a handle on the situation. Soon after, a task force was created to start making recommendations.

In 2005, a commercial hog production facility, located about seven miles from one of the known populations of feral pigs, tested positive for PRRS. CPW knew it was time to step in.

“We knew we needed to address the issues,” Black says. “Feral pigs are a known vector for the spread of PRRS. I can’t say for a fact, but having those feral pigs within seven miles, it’s likely they were a vector for that disease.”

Feral pigs eat just about anything they can catch and destroy the environment.

Open season on feral hogs
In the beginning, CPW employed hunters and private landowners by encouraging them to shoot any feral pigs they saw. Black says they intentionally had a lack of regulations – it was always open season to shoot feral pigs.

“There was no limit, no license requirements, people could hunt day and night with any legal method – archery, muzzleloaders, rifles, etc.,” Black says. “We threw the door open and asked everyone to help us address the problem by killing wild pigs.”

After developing the MOU in 2005, they began live trapping and euthanizing animals caught in corral-like traps and USDA Wildlife Services performed aerial gunning on known populations of pigs with landowner permission. They also initiated a campaign years later disseminating signs to encourage the public to call in feral hog sightings.

Of course, a lot of the work involved continual ground patrol for feral pigs, he says.

“I started educating all Colorado Parks and Wildlife officers about feral pigs – signs to look for, how to distinguish feral or wild hogs from domestic pigs, and developed a reporting system to start gathering data on locations of pigs, types of pigs, numbers of pigs, and more to create a database for the future with the Colorado Department of Agriculture and USDA Wildlife Services.”

In addition, USDA began a monitoring program using environmental DNA (eDNA) water samples, looking for eDNA that could indicate the presence of feral pigs. They complemented this project using a system of trail cameras to obtain photographic evidence of feral pigs. Then, they would follow up with an eradication effort, Black says.

Travis Black shows off the skulls of some of the invasive species he helped eradicate from Colorado in a 15-year partnership.

What makes eradication so difficult?
Nearly 15 years later, after the efforts to address the feral pig problem in Colorado began, the state has successfully eradicated its feral hog populations. But it hasn’t been easy, Black says.

“Feral swine can adapt to most habitats. They have a relatively high reproductive rate, breed at a young age, and have fairly large litter sizes. A population of pigs can easily double in one year due to pigs’ reproductive capacity,” Black says. “They also have the ability to disperse on a fairly rapid scale due to natural immigration and migration.”

But one of the biggest reasons why it’s so tough to wipe out feral pigs? Illegal introductions into the state.

“People really enjoy hunting feral pigs – that leads to some illegal introductions of pigs into our state and makes it difficult,” Black says.

From a hunting standpoint, Texas is a big state for hunting feral pigs, he says. However, if you begin to see feral pigs show up in your state, address the hunting problem up front. For example, Kansas prohibited hunting feral pigs because hunters can inadvertently cause populations of wild pigs to spread.

“I’ll be the first to admit, hunting feral pigs is a kick in the pants,” says Black, a Texas native. “It’s sometimes thrilling, but what can result from feral pig hunting is not a problem you want to have.”

Commercial hunting creates an incentive to bring in hogs and he encourages other states to limit incentives that may exacerbate the problem.

Stop the problem early
In southern states, eradicating large populations of feral swine is almost impossible. Because of this, Black can’t stress enough how important it is to address feral hog problems as soon as possible. In states where this is a new or emerging problem, start educating the public, landowners and state officials on the potential impact feral swine can have on livestock, farmers, wildlife and the environment.

“If laws need to be changed, change them,” Black says. “The longer you wait, the higher the chances are that the population will increase and spread. Form partnerships with interested agencies and take a cooperative approach to address the problem. There’s generally a lot of common ground in dealing with invasive species and their impacts.”

If you see feral swine or transportation activities of the animals, contact the USDA Wildlife Services at 1-866-4-USDA-WS.

More from Farm Journal’s PORK:

Deadly Terrorist Threatens the Lone Star State’s Domestic Pig Herd

Feral Hog Eradication in Missouri: Let the Trapping Continue

Feral Hog Stomachs Tell Story of Destruction

Texas Community Hires Consultant to Fight Feral Hog Problem

Feral Swine: USDA Monitors World’s Worst Invasive Alien Species

The Pros and Cons of Sale-Leasebacks

Thu, 26 Sep 2024 21:14:08 GMT

In today’s challenging environment, farmland sale-leasebacks are becoming more common and potentially smart strategy for farmers. As farmers’ financial positions continue to deteriorate and investing in farmland looks favorable for non-farming investors, these arrangements can be a win-win for both parties.

“In a sale-leaseback, a farmer sells a piece of land to a non-farming investor who will lease the farm back to the farmer for an agreed time period,” says Doug Hensley, president of real estate services for Hertz Farm Management in Nevada, Iowa. “In some cases, the farmer can also negotiate to have the first right to re-purchase if the investor should move to sell the land in the future.”

Hensley says sale-leasebacks are good for two types of farmers:

Those facing financial stress.
Those focused on growth.

“As farmers were renewing operating lines late this winter/early spring, there were some situations where bankers said, ‘You need to sell a piece of equipment or a non-vital 40- or 80-acre tract, in order to free up some cash flow and improve your working capital position,’” Hensley says. “A sale-leaseback can improve the financial position for someone who is carrying too much short-term debt, while still allowing them to maintain operational control of the underlying asset.”

While there is risk in relinquishing control of an important asset, it can be better than the alternative of losing the land altogether.

Flipping Farms

For growth-minded farmers, sale-leasebacks can be similar to the “flipping houses” strategy in real estate.

For growth-minded farmers, sale-leasebacks can be similar to flipping houses. “Farmers can expand the acres they are farming without having to go borrow the money and take on extra debt,” explains John Kirkpatrick, executive vice president for Murray Wise Associates in Clarion, Iowa.

“I’ve also worked with some farm operators who have used sale-leaseback as a growth strategy over time,” adds Hensley. “They may see a farm that needs a little love, and they feel like they have the equipment, manpower and ability to improve that farm. They’ll buy it and improve it over three to five years and then put it back on the market to capture some gain, while maintaining the lease.”

The farmer can then use the profits from selling the land to buy another property and start the process over.

“For most farmers, controlling land via a farm lease can be more profitable than owning the land,” Hensley says. “Additionally, there are many investors still in the market looking at farmland as a diversification play, and they desire a long-term lease relationship.”

Typically, the farmer-seller may find themselves slightly more negotiable on the sale price, in order to attract the investor who will lease the farm back to them at a fair market rental rate. The lease parameters moving forward are negotiated right along with sale/purchase of property, and all the documents are completed at closing. Years ago, Hensley says, leases would last multiple years or even decades. But the typical agreement today is set for one to three years, often with a chance to renew.

Most lease-back sales are done quietly, Kirkpatrick says. He encourages farmers and investors to contact farmland management companies, real estate brokers and lenders. Those professionals can often pair farmers and investors.

Also, if you’re interested in these arrangements, be sure to include your trusted advisors in the process. Lawyers, CPAs and lenders can provide valuable guidance on if this is the right strategy for your farm.

The Nitty Gritty of a Sale-Leaseback

In a sale-leaseback, a farmer sells a piece of land to a non-farming investor who will lease the farm back to the farmer for an agreed-upon time. Farmers can negotiate to have the first right to repurchase the land in the future. Typically, the farmer-seller will lower the price a bit, to attract the right investor, says Doug Hensley, Hertz Farm Management.

The lease parameters are negotiated along with the sale/purchase of the property, and all the documents are completed at closing. In the past, leases would last years or even decades. But the typical agreement today is one to three years, often with a chance to renew.

Read More

Does It Pay to Farm Every Acre you Own?

Strategies To Nail Your Cash Rent Negotiations

Three Tips To Lower Farmland Cash Rent

Learn more about Hertz Farm Management .

Peoples Company Expands Illinois Management Footprint, Acquires Atkins Group Farmland Management Portfolio

Mon, 13 May 2024 15:17:50 GMT

With an acquisition of The Atkins Group’s Farmland Management portfolio, Peoples Company further expands its footprint in Illinois farmland management.

This adds 14,000 acres under Peoples Company’s management. Atkins’ leaders Jim Goss and Sophia Hortin will also transition to lead a newly established Peoples Company office in Urbana, Illinois.

“The Champaign-Urbana area has some of the richest farmland in the country, and anyone in agriculture in Illinois knows the Atkins family and has deep respect for The Atkins Group. We’re thrilled to have the privilege to begin managing their expansive farmland portfolio and continue our growth in Illinois,” said Peoples Company President Steve Bruere. “Having Jim and Sophia open our Champaign-Urbana office was an easy choice. They are perfect fits to continue growing our Illinois operation because of their deep knowledge of the state, focus on implementing strategies that both protect the land while maximizing productivity, ability to effectively bring land to market and experience building large land holdings on behalf of clients. Further, opening an office in the Champaign-Urbana area makes perfect sense as the University of Illinois offers an excellent research and talent pipeline.”

Jim Goss added: “Peoples Company has become known in Illinois for bringing an unparalleled approach to farmland management and brokerage through intensive and comprehensive programs, industry-leading marketing and technology, emerging energy rights management division, and a robust network of agricultural professionals positioned across the country. We are excited to continue building on that foundation and further expand in Illinois.”

Farmers Are Now Being Offered $1,000 Per Acre or More to Lease Their Land For Solar

Wed, 08 May 2024 19:57:37 GMT

The push to add solar energy is gaining traction across the U.S., and it’s coming with sticker shock on just how much solar companies are willing to pay farmers to lease their ground. A survey of farmers shows the majority of farmers are being offered more than $1,000 per acre by companies for solar leasing, and that could also drive up the price of cash rental rates.

The Biden administration has a goal of a net-zero electric grid by 2035, with solar and battery-powered energy as three vehicles to get there. As the administration works to accelerate their “clean energy” plan across the U.S., land is in high demand, especially for future solar projects.

Michael Langemeier, an agricultural economist with Purdue University, says the Ag Economy Barometer is revealing the sticker shock of solar leasing rates. The survey of 400 agricultural producers, is now asking farmers how many had actively engaged in discussions with any companies about leasing farmland you own for solar installation, and the response was surprising.

“It was 19% who said they have engaged in discussions, and so think about that, that’s a huge percentage of the survey respondents have actually engaged in someone about leases. That doesn’t mean they’ve signed a thing, but that means that they’ve actually been approached,” says Langemeier.

The April survey showed a noticeable uptick in the percentage of farmers who reported having a discussion with a company about it in the last 6 months. In April, 19% of farmers said they’ve had discussions, up from 12% in March.

The bigger surprise may be in the high rates solar companies are offering farmers.

58% say the rates were over $1,000 per acre
30% say the rates they were offered ranged from $,1000 to $1,250 per acre
28% say rates were more than $1,200 per acre.

With expanding renewable energy installations such as wind and solar, The Top Producer Podcast host Paul Neiffer asked David Muth of Peoples Company Capital Markets , the Investment platform for Peoples Company, how those land uses change long term land values.

“This is for the entire U.S.,” he adds. “That’s a high rate even for the eastern Corn Belt where our cash rates are much higher, but think about what even a $750 rate would mean in the Great Plains where the cash rents are much, much lower. And so what you’re having here is these solar lease rates that are multiples of the current cash rent rates.”

Langemeier says as farmers and land owners are offered high leasing rates for solar, he thinks the push for solar will then spill over to other cash rents.

“That’s going to put upward pressure on cash rents, and it’s probably going to put upward pressure on land values, given that it’s local,” he says. “And so it probably impacts a fairly local area, depending on whether your area has solar leasing or not, but it certainly has pretty wide ramifications on what’s going on in agriculture.”

How Do Wind, Solar, Renewable Energy Effect Land Values?

With a price tag of more than $1,000 per acre, t’s enticing for farmers who are staring at crop prices below their cost of production. The April Ag Economists Monthly Monitor survey released this week showed farmer sentiments are dropping. The survey, which is conducted by Purdue University and the CME group, fell 15 points from March to 99.

Purdue says it was the weakest farmer sentiment reading since June of 2022 and the lowest current condition rating since May of 2020 as both the current condition index and the future expectations index saw a drop.

“People became less optimistic about what was taking place on their farms today, and they’re also starting to show some evidence of being some concerns about where we’re headed here over the course of the next year,” says Jim Mintert, director of the Center for Commercial Agriculture at Purdue University.

Purdue economists say farmers are concerned about their current financial situation and expectations for weak financial performance in the year ahead were the driving forces behind the fall-off in farmer sentiment. The April Barometer survey was conducted from April 8 through April 12, 2024.

How Do Wind, Solar, Renewable Energy Effect Land Values?

Thu, 26 Sep 2024 18:31:51 GMT

Since the signing of the Paris Agreement and its Net Zero by 2050 iniative, the ripple effects are still being ironed out as the demand for renewable energy increases.

With expanding renewable energy installations such as wind and solar, The Top Producer Podcast host Paul Neiffer asked David Muth of Peoples Company Capital Markets , the Investment platform for Peoples Company, how those land uses change long term land values.

“We’re really seeing emerging revenue streams from our land base–outside of the ag production,” he says. “We’re trying to get our arms wrapped around the asset management strategy and really get this well positioned. So over the next 10 or 20 years, we’re expanding revenue right and capturing that correctly.”

Muth shares the estimate that over $1 trillion dollars a year is being invested globally in the low-carbon energy transition.

“If we step back and look at what that means for farmland, we’re taking our energy production system from highly centralized production facilities and we have to distribute it,” he says.

The team at Peoples Company used the Princeton Net Zero America study as the basis scenario for its work, which shows if there are 6,000 wind turbines in Iowa today, it needs to increase to about 48,000, which could bring almost $1 billion a year in additional revenue back to the landowners from the turbines.

Muth highlights the considerations for landowners with solar power are different than wind.

“With solar, it’s different. There’s certainly a free market element to this where the revenue streams and the value equations associated with the land in different areas will drive just how high they’ll push those numbers,” he says.

Solar’s Impact On Rural Property Values

He notes he’s seen annual leases with standard escalators for $1,100, and there are additional state and federal incentives.

“In Illinois, there’s been a big push, and we’ve seen options for solar development contracts on some of the best of the best farm ground for $1,400. It is what they’re talking about as a starting place on these assets. The core question is because it’s a fundamental shift in land use, how do you look at the underlying land value where you put solar in place?”

Thinking of recent trends, he says Illinois farm land has appreciated 7% a year, but the future appreciation rate is unknown just as the productivity of the land after solar panels are removed is unknown.

“It’s part of this sort of chaos that landowners are having sort through,” he says. “That’s where a pretty detailed discounted cash flow and understanding how much am I really making on that $1,400 an acre lease payment with a 2% escalator if the underlying farmland value doesn’t appreciate the way that the rest of that highly productive Illinois farm ground is going to appreciate.”

Pop-Up Solar: Can Farmers Make Fertilizer, Fuel and Electricity from the Sun?

Muth says the biofuels industry growth will also effect land values as the production of corn and soybeans is needed for Sustainable Aviation Fuel and renewable diesel.
He discusses more about wind, solar, biofuels as well as carbon storage opportunities on The Top Producer Podcast.

Who Is The Driving Force Buying Farmland?

Thu, 25 Apr 2024 19:21:47 GMT

David Muth of Peoples Company Capital Markets, the Investment platform for Peoples Company, shares how institutional investors have reacted to higher interest rates on their land investments pursuits.

“There’s certainly a significant infrastructure of institutional farmland investment groups that are committed to this to the asset class,” he says. “They’re committed to continue maintaining their portfolios and we’ll continue to see quite a bit of activity from those folks, but certainly there is there is a bit of a changing dynamic in their capital stack overall.”

He says while farmers are buyers in more than 80% of the farmland transactions today, the past 30 years have brought changes in who buys farmland and how it’s bought. What started in the ‘90s with more institutional ownership of U.S. farmland became a structured opportunity at a larger scale in the early 2000s. Today, there are multiple farmland REITs such as Farmland Partners and Gladstone Land Company.

Peoples Company recently released a white paper “The Evolution of Farmland As an Institutional Asset.”

Farmland as an investment has five unique characteristics compared to other options, says Muth:

It’s stable
Investors get cash yield
Its appreciation rate
Has a driven long-term outcome
Zero vacancy rate

Muth discusses the current trends on the Top Producer Podcast:

“Certainly, when we went into the financial crisis in 2008, you started to effectively see a lot of the long-term fixed income types of products go to zero. Then you started thinking about quantitative easing and all of the Fed tools that were deployed formally. It became really appealing for a lot of these funds in this class of investor to look at farmland.”
Muth says a few parameters have emerged for the type and location of land deal most appealing to the institutional investor.

“It’s regional—you see a heavier institutional presence in California, the Pacific Northwest, and the Delta,” he says. “These groups target a specific size of deal--$10 million is the threshold typically because of due diligence and overhead costs going into each deal.”

The current interest rate environment has deflated some of the appeal of farmland for this type of investment.

“One significant element is just simply the increasing cost of debt,” Muth says. “A lot of the large institutional farmland buyers will use leverage in order to create a higher IRR (internal rate of return) outcome. And if you go back to when we were really seeing a lot of these funds build right the portfolios built, debt was incredibly cheap.”

Even with higher land rents, Muth says that has not kept up with the service debt costs which have doubled or even tripled in the past several years.

He adds at the same time other investments are showing better annual cash returns from fixed income outcomes and products.

“If you look at farmland values in the Corn Belt, 2% cap rates are pretty common. But you can go out and get fixed income at 5% or 6% with some really stable products these days,” he says.

Muth says farmland investors are still looking for deals—deploying a strategy of looking for distress deals for example in California almond production or Washington state apple production.

New Tools Bring New Investors

Peoples Company has partnered with Acre Trader, which is introducing farm land ownership as a retail investment.

“For folks that maybe don’t have the capacity to go out and buy a farm on their own, for this group or class of investors, Acre Trader enables access to the farmland asset,” Muth says. “They’re representing a movement of retail capital into farmland, and we’ve gotten really interested in working with registered investment advisors and wealth managers.”

New Land Analysis Tool Puts a Twist on Plat Book Concept

Muth shares more on Top Producer Podcast:

ASFMRA Unveils 6 New And Updated Seminars

Thu, 11 Apr 2024 19:17:12 GMT

The American Society of Farm Managers and Rural Appraisers (ASFMRA) is set to introduce six new and updated continuing education seminars designed to deliver targeted, applicable knowledge contributing to the overall advancement of ag appraisal practices. Spanning 32 hours of continuing education, the seminars will have both in-person and virtual options.

The Appraiser as an Expert Witness: Learn about the appraiser’s role within legal frameworks such as evidence rules, civil procedures and strategic challenges posed by attorneys.
Farm and Ranch Succession Planning: This session offers strategies to mitigate risks and tax liabilities during farming operation transitions.
Appraising Ag Lands in Transition: Understand the methodologies to ascertain the highest and best use of properties.
Introduction to Native American Real Estate Appraisal: Gain knowledge and historical insights in appraising Native American trust lands.
Principles of Permanent Planting Valuation: An examination of factors affecting permanent crops—from site selection to market trends.
Rural Sales Analysis and Verification: This seminar addresses the creation of a reliable market database and highlights the significance of thorough sales analysis for accurate appraisal outcomes.

Education week will be in Des Moines, Iowa, from July 16-18. The event will feature several qualifying education courses for appraisers as well as farm management classes for anyone considering accreditation with the ASFMRA.

Bankruptcy Puts $370 Million Of California Farmland for Sale

Sun, 04 Feb 2024 23:15:19 GMT

Prima Wawona , a stone fruit producer in Fresno, Calif., announced in October it filed for bankruptcy with more than $600 million in debt. Since then, the company said it would liquidate its assets through after an unsuccessful attempt to sell through auction.

Now, The Fresno Bee reports the company will lay off 5,411 workers ahead of the sale of more than 16,000 acres of farmland valued at $370 million. The Bee reports the layoff impacts 3,743 seasonal employees.

The Bee said interest is high in the land as Fresno Irrigation District, Alta Irrigation District and Consolidated Irrigation District service some of the parcels.

Prima Wawona became the largest stone fruit grower in the country following the acquisition of Gerawan Farming in 2019 . It also added the stone fruit breeding assets of Burchell Nursery in 2018 .

Paine Schwartz Partners invested in the companies following the merger. The Bee said industry insiders estimated the value of the Prima Wawona at $1 billion at the time of the merger.

The Bee said the company indicated mismanagement, a lack of understanding of the tree fruit industry and ineffective high-priced consultants as part of the reasons for its collapse.

“The liquidation of Prima Wawona is a sad day for the generations of men and women who worked tirelessly to build and tend to these orchards over the last half-century,” Dan Gerawan, former CEO, told The Bee.

Editor’s note: Wawona Frozen Foods issued the following statement related to the Prima Wawona matter.

“The San Joaquin Valley-based, family-owned and operated Wawona Frozen Foods is not affiliated in any way with the fresh fruit company, Prima Wawona. Wawona Frozen Foods is a third-generation company which just celebrated its 60th year in business and is among the largest frozen fruit companies in the nation.”

2023 Farm Manager Of The Year: Ryan Kay

Fri, 26 Jan 2024 17:40:14 GMT

Ryan Kay has been named the 2023 Farm Manager of the Year, an award presented by the American Society of Farm Managers and Rural Appraisers and sponsored by Syngenta.

“I feel very honored by receiving the award and appreciate my peers voting for me,” Kay says. “I work with so many people that make me look as well as I do. So I definitely know that it’s a team effort, and I appreciate all the people that have helped me to get to this point.”

Kay works in Mount Vernon, Iowa, and has been an accredited farm manager with Hertz Farm Management for 11 years. Before this role, he worked for Pioneer as a research associate and production agronomist. The decision to make a career change was inspired by his own family’s farm.

“I grew up on a farm in Atlantic, Iowa, and helped my dad manage the farm,” he says. “While working with my dad, I saw how absentee landowners often needed help making decisions on what the next steps should be.”

Kay currently manages farms for absentee landowners in eastern Iowa—working with tenants to make improvements on the properties and maximize revenue for clients.

“The goal of my job is to make sure that we have a win-win situation for both parties,” he says. “Most of our clients want more than just the income off the farm. They want to make sure conservation measures are in place, and they want to know who’s working on the ground and have a succession plan. I have clients that work with third- and fourth-generation farmers, so it’s pretty rewarding for them to know that they’ve been working with the same family for this many generations.”

Kay shares his favorite part of the role is the people he works with each day.

“I don’t think we realize how lucky we are,” he says. “There’s a lot of different industries out there where it’s dog-eat-dog, but in agriculture, it’s really down-to-earth.”

And that down-to-earth attitude is something Kay recommends to anyone looking to get involved in the industry.

“The biggest tool is not to burn any bridges and to be professional and respect everybody,” he says. “Everybody has their own opinion that may be right or wrong, but you just need to understand where they’re coming from.”

Education and Accreditations

Bachelor’s degree in agricultural business and management from Iowa State University
Master’s degree in agronomy and crop science from Iowa State University
Accredited Farm Manager
Licensed real estate salesperson in Iowa
Accredited Land Consultant

Personal Details

Treasurer, Realtors Land Institute, Iowa Chapter
Involved in several local committees and community organizations, such as church
Enjoys spending free time with family and his two young children
Hobbies include outdoor activities such as visiting parks, fishing and snow skiing

ASFMRA Names 2023 Professional Farm Manager of the Year

Thu, 25 Jan 2024 18:18:20 GMT

The American Society of Farm Managers and Rural Appraisers (ASFMRA) has named Ryan Kay, AFM, of Hertz Farm Management the recipient of the 2023 Professional Farm Manager of the Year Award.

This award, sponsored by Syngenta, recognizes an AFM accredited member or team who has made a significant impact on the farm management profession. It was presented to Kay during the 2023 ASFMRA Annual Conference on November 15, 2023 in Nashville, Tenn.

Kay has been with Hertz Farm Management since January 2013 in their Mt. Vernon, Iowa office and is a member of the ASFMRA, the Realtors Land Institute and has served in leadership positions on many state committees. He has experience in adding value to land by making capital improvements, adding specialty contracts, conservation and agronomy practices.

“Ryan has demonstrated exceptional leadership over the years and continues to serve his farm management clients with integrity and care. We extend our congratulations to Ryan on this incredible achievement,” said Randy Hertz, CEO of Hertz Farm Management, Inc.

Resources To Help Shape Expert Rural Appraisers

Thu, 11 Jan 2024 21:42:15 GMT

By Andrew Eames, ASFMRA marketing and communications manager

Although it’s not as heated as it has been in recent years, the farmland market continues to command high prices and attract substantial investor interest. Within this context, the American Society of Farm Managers and Rural Appraisers (ASFMRA) maintains its position as the premier educational source for appraisers who focus on rural and agricultural property valuation.

The ASFMRA’s specialized courses and seminars are tailored to empower appraisers in handling the complexities often encountered in rural and agricultural properties. Its curriculum goes beyond the basics to prepare appraisers for diverse scenarios—from valuing specialized agricultural facilities to dealing with conservation easements. This unique training is invaluable in today’s dynamic farmland market, where understanding subtleties can make all the difference.

The accredited rural appraiser (ARA) and rural property review appraiser (RPRA) accreditations offered by the ASFMRA are not just certifications, they serve as badges of distinction in the appraisal world. These professional designations signal a profound understanding and expertise in rural property appraisal, making ASFMRA-accredited professionals highly sought after by clients and employers alike.

The ASFMRA’s appraisal education is pivotal for those aiming to excel in the rural property market. The organization’s commitment to high-quality, relevant education ensures that its members are well-equipped to meet the evolving demands of the farmland market. This makes them invaluable assets in the field of rural property appraisal.

Take the next step in your career by visiting the 2024 education calendar on ASFMRA’s website today.

Upcoming offerings include:

15-Hour Uniform Standards of Professional Appraisal Practice (USPAP) Course, Basic Appraisal Principles & Procedures (bundle discount)
Business Valuation and Going Concern Seminar
Sales Comparison Approach for General Appraisers
Livestock Ranch Seminar
Appraisal of Water Rights Seminar

Which Foreign Country Owns the Most Farmland in the U.S.? Hint: It's Not China

Thu, 11 Jan 2024 17:24:37 GMT

Controversy continues to grow across the U.S., and China is the primary target of the new rules. However, China doesn’t own the most farmland in the U.S., according to a new USDA report. It’s actually Canada, which accounts for 32%, or 14.2 million acres.

Rounding out the top five are the Netherlands at 12%, Italy at 6%, the United Kingdom at 6% and Germany at 5%. Together, citizens in those countries hold 13 million acres, or 29%, of the foreign-held acres in the U.S. China owns less than 1%, or 349,442 acres.

All told, 43.4 million acres of forest and farmland in the U.S., or 3.4% of all ag land, is foreign owned as of Dec. 31, 2022. Roughly 30 million of those acres are reported as foreign-owned, with the remainder primarily under a 10-year-or-longer lease. Of the 30 million, 66% is owner-operated, 14% has a tenant or sharecropper as the producer and 12% report a manager other than the owner or a tenant/sharecropper as producer. The remaining 7% are “NA.”

USDA says the two biggest Chinese-owned companies with land holdings in the U.S. are Brazos Highland and Murphy Brown LLC, which owns Smithfield Foods. Brazos Highland reported owning 102,345 acres, and Smithfield owns 97,975 acres.

The top five states with the largest Chinese holdings are:

Texas at 162,167 acres
North Carolina at 44,776 acres
Missouri at 43,071 acres
Utah at 32,447 acres
Virginia at 14,382 acres

USDA reports those five states combined account for 85% of China’s farmland ownership. In Texas, USDA reports China has long-term leases associated with wind energy, and in North Carolina and Missouri, ownership is tied to Smithfield and producers who contract for pork production.

More States to Take Up Possible Bans in 2024

Foreign-held farmland has become a hot button topic on Capitol Hill. Farm Journal Washington correspondent Jim Wiesemeyer thinks it will continue to gain momentum in 2024 as a political ploy used by candidates.

“It’s an emotional issue, and it’s not a simple issue either,” Wiesemeyer says. “I was recently in Missouri, and some commodity leaders worry about the negative consequences of going too far. No one’s saying China should not be watched relative to buying farmland near airports, national security is involved in that case, but more than a few farmers are looking at the potential downsides for pork producers who contract with Smithfield and the number of acres they own.”

One of those unintended consequences is playing out in Arkansas.

“I’m announcing Syngenta, a Chinese state-owned agrichemical company, must give up its landing holdings in Arkansas,” says Gov. Sarah Huckabee Sanders, referencing a 160-acre research site owned by Northrup King Seed, a Syngenta subsidiary.

Eric Boeck, president of Syngenta Seeds North America, told Farm Journal editor Clinton Griffiths: “EPA and USDA many times require us to do work and permitting right in the same state as we’re going to sell products. One of the first things we have to make sure we figure out is how we work with the local community to make sure we’re still getting products tested in their backyard, so we have the ability to sell those products.”

Syngenta argues if they sell that particular farm, Arkansas farmers will be at a disadvantage because research can’t be done in the same weather and soil conditions.

“We’re heavy in the soybean market in Arkansas, some of those maturity zones, we have a very significant market share and savings,” Boeck says. “We want to make sure we’re protecting those farmers’ abilities to be able to use our products.”

Wiesemeyer says the bigger issue for U.S. farmland might be solar panels, with farmers in states like Missouri reporting companies have offered to pay more than $1,000 per acre cash rent to put solar panels on their farm. At such a high price, he says it’s eating up acres of farmland, with the potential to grow even more in 2024.

Look Out Iowa! Cropland Auction Sets Fresh Record in North Dakota

Fri, 03 Nov 2023 21:36:43 GMT

As mortgage rates climb to 20-year highs, near 8%, current high-interest rates are eating away at the housing market. This year is currently on pace to see the fewest home sales since 2008. However, farmland sales aren’t witnessing the same sticker shock. In North Dakota, Pifer’s Auctioneers says it just set a new land sale record in the state.

According to a post on Facebook, on November 1, Pifer’s Auctioneers hosted a live and online land auction. The farm featured 320 acres of highly-productive land in Pembina County, N.D. That’s the very northeastern corner of the state in the Red River Valley. The auction house says the land sold for $17,500 per deeded acre to a family farm operation. It says that shattered the all-time high for North Dakota cropland. Roughly 30 bidders were on hand for the auction.

The Pifer team says that area is known to be tight where very few farms ever get exposed to the market. Another of the enticements comes from the crop rotations in that region. Farms typically grow potatoes, sugar beets, wheat, corn, barley and soybeans. The ability to produce sugar beets and potatoes on medium to heavier loam soil, without irrigation, was a strong draw.

Pifer says at $5.6 million, or $2.8 million per quarter, it breaks down to:

Parcel 1: $18,571 per FSA cropland acre
Parcel 2: $18,393 per FSA cropland acre

Jim Rothermich, vice president of Iowa Appraisal, calls this a bell ringer for the state of North Dakota. Looking at Iowa, he says land market conditions remain steady and strong, but aren’t as hot as they were a year ago.

“Since peaking around May 2022, the market has declined a small percentage and is now pretty much in equilibrium, or flat,” Rothermich explains. “Sales north of $20,000 per acre still happen but nothing like they did in 2022.”

While rising interest rates, higher input costs, drought and corn prices below $5 per bushel have put the brakes on the large increases between 2020 and 2022, cash rent auctions still yield solid numbers, he adds.

“I think market conditions will be stable for the next six months to a year,” Rothermich says. “After that, lower farm income and rising interest rates will whittle down land prices. I do not think we’ll see a double-digit decrease, but there is potential for a single-digit decline. Good quality cropland is still in demand.”

When comparing 2023 to the hot markets of 2022, he says it’s clear land values have cooled off.

Survey Shows Land Values Leveling Off

Thu, 05 Oct 2023 13:01:35 GMT

The Realtors Land Institute - Iowa Chapter has announced the results of it’s September 2023 Land Trends and Values Survey.

This survey is conducted each year in March and September. Participants in the survey are specialists in farmland and share their opinions about the current status of the Iowa farmland market.

For the September survey, they were asked to estimate the average value of bare, unimproved land with a sale price on a cash basis as of Sept. 1, 2023. Pasture and timberland values were also requested as supplemental information.

The results of the September survey showed a minor decrease of -0.2% on a statewide average for the March 2023 to September 2023 time period. This is following the September 2022 to March 2023 time period that showed a 0.8% increase, giving a year-over-year increase of 0.6% for the State of Iowa.

The survey results indicate that after double-digit increases through much of 2021 and 2022, the 2023 land market has confirmed its move toward leveling off. The report authors note, however, the continuing struggle between rising interest rates trying to pull the market lower while positive net farm incomes allow the market to remain supported at today’s values.

The survey results by crop reporting district range from a 2.9% decrease in the northwest district to a 1.3% increase in the south central district. Timber and pasture acres showed slight gains with a 1.1% increase in timberland values and a 1.4% increase in pastureland values across the state.

Reduce Competition: New Tool Partners Investors and Farmers

Wed, 27 Sep 2023 21:36:18 GMT

If asked the question “What’s a piece of ground you would love to own?” most growers could probably picture it. Maybe it’s a neighboring farm or rented land that’s been in the family for decades.

But if that land came up for sale tomorrow, would the capital to purchase it be readily available?

Farmers have plenty of equity in their land, but it’s not easily accessible and could lead to them losing out on that sale. This is a problem the team at Fractal – a U.S.-based farmland financing platform – has set out to solve.

“I’ve had so many farmers that say, ‘We need to double in size, or we need to increase by X number of acres’,” says Ben Gordon, Fractal co-founder. “But when you do the math to see the capital it will take to do that, there isn’t a clear plan.”

To help create that growth plan, Fractal pairs farmers wanting to expand their operations with hands-off investors who recognize the value of farmland.

Farmers Stay in the Driver’s Seat
Fractal purchases minority ownership – up to 45% - in a piece of high-quality cropland selected by the farmer. These acres must be owned and operated by the farmer.

As for the investors, they leave the decision-making up to the one who knows the land best.

“Farmland is a great investment, and farmers are best positioned to manage that investment,” says Gordon.

“We raise capital from outside investors in a big pool and then we find the farms. Investors don’t own a single access to a single farm – they own a portion of a pool.”

With the money from the investment, the farmer can purchase new assets needed for the operation such as land, storage, etc.

The Details
The investment is for a 10-year term. After the first two years, the farmer can buy out Fractal’s ownership at any time. They can also renew the investment once it ends.

In exchange for the investment, the farmer pays an annual premium. This fee can be discounted by implementing regenerative practices on the land such as cover crops and no-till.

Gordon shares that while Fractal may not be a fit for everyone, he hopes it will provide an option to families hoping to keep their farm operating for years to come.

“I’m hoping that we are one small part of a bunch of great legacies and great operations being able to continue,” Gordon says.

Inflation and Recession Pressures: Is Farmland a Good Investment Right Now?

Wed, 23 Aug 2023 15:52:30 GMT

The Federal Reserve is hosting its Economy Policy Symposium this week, which has all eyes on Jackson Hole Wyoming for further details on inflation, interest rates and if a recession is looming. But would a recession effect your operation the way you think?

According to Bruce Sherrick, professor at the University of Illinois, you might not need to worry about what inflation is doing to your farmland values.

“Farmland returns are very highly correlated with inflation,” Sherrick says. “Most importantly, it has a positive correlation with inflation.”

Sherrick says this correlation is derived from the size and debt of the industry.

“Put the entire holdings of the country on one balance sheet and it’s now four trillion plus and only 13% leveraged, so 13% debt underneath it,” he says. “An interest rate change doesn’t have as big of a proportional impact as if you were talking about companies traded on the stock exchange, where the average leverage turns out to be around two-thirds.”

While the percentage of debt is low in comparison, he also highlights it’s mostly long-term, fixed-rate debt. Increasing interest rates won’t have as large of an impact on that, but it will decrease transactions.

Outside of inflation, there may be other reasons farmland values remain elevated.

According to the Federal Reserve Bank of Kansas City, a steady supply of land sales and strong demand from farmers has likely supported broad resiliency of real estate values so far in 2023.

Is It a Good Time to Invest in Farmland?

The Kansas City Fed also reported that growth in farmland values has eased from recent years but remains steady. So, despite higher interest rates, farmland remains a wise investment opportunity.

“People sometimes refer to farmland as an investment in gold, plus a coupon,” Sherrick says. “You get a fairly low annual cash flow, fairly high long-term rates of return and tax advantages to the asset classes.”

He outlines how the type of farmland to invest in remains up to the buyer’s background and risk tolerance.

Annual production crops – such as corn, soy and wheat – offer higher stability due to tenants or crop insurance to help manage risk. However, permanent crops – such as tree nuts, wine grapes or citrus – would be expected to have higher total return over time but higher volatility.

“If I were picking both from a financial and an emotional perspective, the next place I could put a dollar, I still would favor farmland pretty highly,” said Sherrick.

As for an outlook into 2024, Sherrick says to expect moderate changes.

“I won’t be surprised if in the next year we have a softening of land values,” Sherrick says. “It won’t surprise me, but I’m not expecting a crash and I don’t see it as being driven entirely by interest rates.”

Hear more on The Top Producer podcast, hosted by Paul Neiffer:

The Farm CPA Podcast: Steve Bruere, Peoples Company

Fri, 28 Jul 2023 14:28:02 GMT

This week Paul Neiffer has a conversation with Steve Bruere, president of Peoples Company.

Bruere grew up surrounded by agriculture on his family farm in Warren County, Iowa. Today he uses that expertise in agricultural real estate and farmland management.

“I always had a passion for real estate,” he says. “Growing up I wanted my family to buy any farm that would come up for sale, and we didn’t buy enough of them as far as I was concerned.”

While in college, Bruere bought his first piece of farmland (it was financed by his money earned selling sweet corn and pumpkins as a teenager). He also earned his real estate license. The day after his college graduation, he started selling real estate.

In 2003, Bruere became president of Peoples Company, which specializes in real estate brokerage, appraisals and farmland management. Today the company is licensed in 26 states for real estate brokerage and 30 states for real estate appraisals.

Listen to the podcast episode:

How does Bruere describe today’s farmland market? “Wild.”

“It’s probably the hottest real estate market I’ve been a part of in 18 years,” he says. “You’ve just got this perfect storm of high commodity prices, nice government payments and low interest rates.”

Farmland is definitely catching investors’ eyes, Bruere adds.

“During COVID, folks were stuck in their homes and worried about the food supply chain,” he says. “Now we have a newfound appreciation for what farmland means. The stock market got cut in half, while farmland just sits there steadily holding its value.”

As a result, demand from both farmers and investors is strong.

“Right now, we have farmers aggressively buying farmland again and this outside capital that appreciates the attributes of a farmland investment now more than ever,” he says. “This farmland markets incredibly dynamic.”

Listen to additional episodes of the Farm CPA Podcast:

Episode 7: Ken McCauley from Kansas

Episode 6: Dick Wittman and Cori Wittman Stitt from Idaho

Episode 5: Roric Paulman from Nebraska

Episode 4: Dave Nelson of Iowa

Episode 3: Jim Wiesemeyer, Pro Farmer

Episode 2: Breaking Down the American Families Plan

Episode 1: Sara Schafer, Top Producer

Tile Drainage Spacing With The Highest Economic Return

Thu, 27 Jul 2023 11:00:00 GMT

A study recently published in the 2023 Journal of the ASFMRA titled “Economic Analysis of Subsurface Tile Drainage Spacing” presents valuable insights based on data collected between 1984 and 2021 from a long-term drainage experiment in southeast Indiana. The study authored by Michael Langemeier, Eileen Kladivko and Edward Farris, compared four in-field drainage spacings: 16', 33', 66' and 133'.

The researchers evaluated various economic factors such as gross return per acre and net return per acre to determine the most profitable spacing option. As part of the analysis, the researchers also incorporated risk analysis using expected utility analysis and stochastic dominance.

The option for greatest return

The findings revealed the 16' spacing resulted in the highest gross return per acre. However, due to the high cost of tile installation associated with this spacing, the net return per acre was significantly lower compared with the other spacing options. Surprisingly, the 66' spacing emerged as the most economically viable choice because it yielded the highest net return per acre.

The 66' spacing not only offered a better net return per acre but also exhibited a higher certainty equivalent of net returns. The certainty equivalent represents a risk-adjusted return that considers average net returns and downside risk. The study employed second-degree stochastic dominance analysis, which showed that the 66' spacing was preferred by risk-averse decision-makers.

To account for variations in economic parameters, the researchers conducted sensitivity analyses. They tested different discount rates, tile installation costs and useful life assumptions for the drainage system. While these factors influenced the average net returns and certainty equivalents, the relative superiority of the 66' spacing remained consistent across the scenarios.

It is important to note this study focused primarily on economic aspects and did not extensively explore agronomic and water quality factors associated with tile drainage. However, previous research suggests tile drainage offers benefits such as improved timeliness of fieldwork, increased crop yields, enhanced infiltration and reduced sediment and nutrient losses in poorly drained soils.

What to learn from this study

The study’s findings provide valuable insights for farmers and land managers considering subsurface tile drainage in their fields. By considering the economic implications and incorporating risk analysis, decision-makers can make informed choices for drainage spacing.
Attendees of the ASFMRA’s Annual Conference in November will hear from Langemeier who will provide additional context and insight into these findings during a breakout session.

New Farmland Bill Would Create a Public Database for Foreign Land Ownership

Sat, 22 Jul 2023 03:07:00 GMT

Sens. Chuck Grassley (R-Iowa) and Tammy Baldwin (D-Wis.) introduced a new bipartisan bill , the Farmland Security Act of 2023 , seeking to further boost transparency in foreign ownership of U.S. farmland.

The legislation builds upon measures introduced by the same senators in the Farmland Security Act of 2022 and amendments to the 1978 Agricultural Foreign Investment Disclosure Act. This bill would require greater transparency for foreign purchases of U.S. ag land, impose stronger penalties for reporting non-compliance, and mandate USDA to audit a minimum of 10% of foreign ag land ownership reports annually.

The issue of foreign ownership is increasingly important as nearly half of U.S. ag land is owned by individuals aged 65 and over, and approximately 100 million acres are expected to change hands over the next decade due to retirement.

What’s included in the Farmland Security Act of 2023?

The measure necessitates a transition to a digital filing system and a public database on foreign ownership for researching ownership trends. It also requires the USDA to report on foreign investment impacts. The bill further emphasizes transparency, complete and accurate data collection, and greater understanding of foreign ownership.

The new legislation introduces stricter penalties for non-compliant foreign owners or “shell companies” by removing the current fee cap of 25% of land valuation, imposing a 100% land valuation fee for non-reporting shell companies unless corrected within 60 days of notification. It authorizes $2 million annually for administration as amended in the Agricultural Foreign Investment Disclosure Act.

Other stipulations include USDA research into foreign ownership of agricultural production capacity and foreign participation in U.S. ag, along with investigations into the use of “shell companies”. State and county-level staff would also be trained to identify non-reporting foreign-owned farmland.

Rural Economy Slows While Farmland Values Stay Strong

Thu, 20 Jul 2023 21:10:22 GMT

The rural economy seems to be set on cruise in neutral gear. That’s according to the Rural Mainstreet Index (RMI) from Creighton University.

For February 2023, the RMI sits at 50.1, down from 53.8 in January. This was the third straight month the overall reading stayed above the growth neutral threshold.

The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral and is generated by a monthly survey of bank CEOs in rural areas of a 10-state region that are dependent on agriculture and/or energy.

“The Rural Mainstreet economy continues to experience slow economic growth,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI. “Only 7% of bankers reported improving economic conditions for the month with 85% indicating no change in economic conditions from January’s slow growth.”

Meanwhile, the region’s farmland price index decreased to 63.5 from January’s 66. This was the 29th straight month that the index has advanced above 50.

As a result of solid farm financial conditions, the farm equipment-sales index stood at 52.1, which was down significantly from January’s 61.4. The index has risen above growth neutral for 25 of the last 27 months.

The February survey polled bankers on importance of ethanol, as the region contains 73% of the nation’s ethanol plants and accounted for 76% of U.S. ethanol capacity for 2022.

Around 90% of bankers with an ethanol plant in their area indicated it was an important industry for their local economy.

To meet President Biden’s CO2 reduction goal contained in his Inflation Reduction Act, ethanol plants would be required to reduce their CO2 emissions by 40% by 2030. This will likely mean the capture and sequestration of the CO2 or the closure of a high share of the plants.

Around 60% of bankers support this process assuming adequate compensation to farms over which the pipelines cross. Around 23% of bankers expect that the use of imminent domain will be required to allow underground pipelines to cross farmland in their area.

The slowing economy, higher borrowing costs and labor shortages continued to constrain the business confidence index to a weak 44.4, but up from 40.4 in January.

“Over the past 11 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss says.

The RMI, which started in 2005, represents an early snapshot of the economy of rural agricultural and energy-dependent portions of the nation. It focuses on 200 rural communities with an average population of 1,300.

Nebraska Farmland Values Jump 14% in 2023 — Up 30% in Two Years

Thu, 20 Jul 2023 20:38:19 GMT

Farmland values in Nebraska are at historic levels. With a statewide average of $3,835 per acre, values are up 14% from 2022, according to the preliminary findings of the University of Nebraska–Lincoln’s 2023 Farm Real Estate Market Survey .

This double-digit jump is on top of the 16% increase in 2022. This year marks the second-largest increase in the market value of agricultural land in Nebraska since 2014 and the highest non-inflation-adjusted statewide land value in the 45-year history of the survey.

The survey attributes the rise in agricultural real estate values to 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.

Low interest rates on loans in early 2022 and concerns about inflation fueled demand for investment in land, shared Jim Jansen, University of Nebraska Extension agricultural economist who co-authored the survey and report.

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

The survey reports market values on several types of land across Nebraska. Here are the highlights:

Dryland cropland with irrigation potential was up 16%.
Dryland cropland without irrigation potential rose 13%.
Center pivot-irrigated cropland rose 13%.
Grazing land and hayland land rose 14% to 17%.

Rental Rates on the Rise

Nebraska cash rental rates for dryland cropland rose 7% to 11% across the state.
Pasture and cow-calf pair monthly rental rates rose 6% to 7%.

The Nebraska Farm Real Estate Market Survey is an annual survey of land professionals, including appraisers, farm and ranch managers and agricultural bankers. It is conducted by the Center for Agricultural Profitability, based in the Department of Agricultural Economics. Final results from the survey are expected to be published in June.