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2013 Nebraska Agland Market Highlights PowerPoint PPT Presentation


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2013 Nebraska Agland Market Highlights. by Bruce Johnson UNL Department of Agricultural Economics [email protected] The Market in a Nutshell “A $ 7 Corn Land Market With $ 5 Corn on the Horizon”. Recent History:. Land Boom Conditions. Nebraska at the “Epicenter”

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2013 Nebraska Agland Market Highlights

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2013 nebraska agland market highlights

2013 Nebraska Agland

Market Highlights

by

Bruce Johnson

UNL Department of

Agricultural Economics

[email protected]


2013 nebraska agland market highlights

The Market in a Nutshell

“A $7 Corn Land Market

With $5 Corn on the Horizon”


2013 nebraska agland market highlights

Recent History:

Land Boom Conditions

Nebraska at the “Epicenter”

of the U.S. Land Boom


2013 nebraska agland market highlights

Agricultural Land Markets up Across

the Country, but Nebraska And Neighboring

States Leading the Nation

0 5 10 15 20 25 30 35 40

Rank / State

USDA Farmland Value Percentage Changes

6/1/2011 – 6/1/2012

Source: Economic Research Service, U.S. Department of Agriculture


2013 nebraska agland market highlights

The Current Market

Nebraska Land Values Climb 25% in Past 12 Months

2013 Values and Recent Trends by Land Class in Nebraskaa

a Source: Annual February 1st UNL Nebraska Farm Real Estate Market Surveys.

b Value of pivot not included in per acre value.


2013 nebraska agland market highlights

Sharp Upward Advances Across the State

2013 Nebraska Farmland Values and Recent Trends

by Sub-State Region

Source: Annual UNL Nebraska Farm Real Estate Market Surveys.


2013 nebraska agland market highlights

Nebraska Nominal

Agricultural Land Values

Longer-Run

History:

  • Upward but not steady climb for several decades

  • “Boom to Bust” event just 30 years ago

  • Major climb in nominal values in recent years

2013P


2013 nebraska agland market highlights

2013 Nebraska Values Adjusted For Inflation At New Heights!


2013 nebraska agland market highlights

Key Land Boom Drivers

#1 Record-Shattering Farm Income Levels


2013 nebraska agland market highlights

Key Land Boom Drivers

#2

Historically Low Interest Rates

Farm Income Levels

Capitalization Rates


2013 nebraska agland market highlights

Estimated Net Rate of Return on Investment: Selected Years

Percent

0 1 2 3 4 5 6

2012:

Irrigated Land

Dryland Cropland

Grazing Land

2007:

Irrigated Land

Dryland Cropland

Grazing Land

2002:

Irrigated Land

Dryland Cropland

Grazing Land

Source: UNL Nebraska Farm Real Estate Market Developments Survey Series


2013 nebraska agland market highlights

Value–to–Cash Rent Ratio

Climbing into New Territory!

Value-to-Cash Rent Multiple For Eastern Nebraska Center Pivot Cropland, 1981-2012P


2013 nebraska agland market highlights

What’s On The Horizon?

Prevailing Drought

Cutting Production?

Increasing Input Costs?

$5/Bu. Corn?


2013 nebraska agland market highlights

Cash Rent Market Trends More Moderate


2013 nebraska agland market highlights

Question:

Are Tenants Taking on

Too-High of Rents?

Answer:

MAYBE!


2013 nebraska agland market highlights

Depends on 2013 Commodity

Prices and Yields

If Paid $350/AC for Irrigated and $220/AC Dryland Cropland

If Paid $350/AC For Irrigated

and $220/AC Dryland Cropland


2013 nebraska agland market highlights

Summing Up:

The Boom Years May Be Over

Real Estate Meltdown Unlikely

--But Some Readjustment

on the Horizon


2013 nebraska agland market highlights

Your Thoughts:

Corn Price In:

2013?

2014?

2015-2020?

Weather Patterns In:

2013?

2014?

2015-2020?


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