Mobridge Reminder, February 27, 2023
Read the full article from the All About Ag insert of the February 27, 2023 issue of the Mobridge Reminder here, or click on this link:
https://www.mobridgetribune.com/pageview/viewer/2023-02-27#page=10
If you’ve been watching the land market over the past year, you’ve seen some exceptional land sales. The Ag land market has no doubt been quite strong. Sometimes putting that data into visual form can be a good way to really see the market trends, which is what we’ve done here using the results published by the SDSU Extension from their SD Farm Real Estate survey.
Values changed dramatically and the change came fast. South Dakota cropland values in 2022 were up 26.8% from the previous year, according to this survey. In some cases, we saw new all-time highs above values at the previous peak in 2014/2015.
Pastureland values have also increased by double digits, although not quite at the same rate as cropland. This survey puts pasture land values up 17% from the previous year, and also surpassing some previous record highs.
So what is driving all this growth? Many factors are at play here. Federal government stimulus payments certainly helped boost balance sheets. Lower interest rates at the outset and the prospect of rising interest rates on the horizon may have contributed to some of the aggressiveness. However, interest rates have a lesser effect on the land market than the residential market as land transactions more often tend to be cash sales. Strong commodity and cattle prices, limited inventory on the market and uncertainly in other investment options, such as the stock market, all contribute as well.
How long will it last? Your guess is as good as mine on that one. My best advice is if you’re thinking of selling sometime in the near future, now might be as good a time as any. If you’re looking to buy, it’s a competitive market so be in contact with your banker or investment advisor so that you’re ready to strike when the right opportunity presents itself.
If you would like to visit about values for your specific property, give me a call. I can be reached at 605-848-4502 or [email protected].
