In the months leading up to harvest, there hasn't been much farmland listed for sale in Nebraska. However, Ron Stock, co-owner and CEO at Stock Realty & Auction Co. and Big Iron Realty, notes that could soon change. "We're hearing rumors there's going to be more land coming on the market this fall," Stock says. "People are calling and asking what their farm is worth. They're calling more than they were last month. That's a hint there's going to be more land coming to market this fall."
Along with hints of more land coming to market this fall, Stock adds small amount of lenders are asking landowners to sell small parcels of land to free up cash flow in order to get refinanced for the next year.
And although there hasn't been a lot of land listed for sale recently, Stock says there's still interest in buying land among farmers who are in good financial shape and took advantage of higher commodity prices several years ago to pay off debt.
"A third of the farmers out there are in very, very sound financial shape. They're interested in land. The other third in good shape, and the remaining third are younger growers building their business. Those are usually 25- to 40-year-old growers in that 33% group," says Stock. "Most of the interest is in irrigated land. As is typical, with no guarantees of a crop, dryland acres have a lot less interest than irrigated."
Commodity prices are the primary driver, but Stock adds that doesn't mean growers aren't spending money; they're just spending it more conservatively. "With corn prices going down a solid 15% in the last month, everybody's getting real conservative and just not spending as much money," he says. "If they need machinery, they're not buying new. They're buying good, used machinery, which seems to be selling for a good price. That's been one of the big surprises for us. Anything priced under $60,000 in used farm equipment in an auction seems to be selling at full retail."
And there are some bright spots to look forward to. Despite persistent dry conditions in the middle of the growing season for parts of Nebraska, late-season rains have helped improve conditions, and forecasts are calling for a near-average corn crop in Nebraska, although a lot can happen between the time this report is written and harvest.
"In the last 30 days, most of the state has been getting ample rain, so it looks like the crop is going to be a decent crop. Some of the corn is firing right back up again. It'll be interesting to see what yields are like," Stock says. "There's a big question mark on cash rents. Owners are hearing cash rents are going to come down, and tenants are saying they'll come down. That will be affected by low commodity prices."
Stock contributed to this report. Stock is a licensed real estate broker and has been in business with his brother, Mark, for 32 years. He is licensed in Nebraska, Kansas, Oklahoma, Colorado, South Dakota, Iowa, Minnesota and Missouri. He can be reached at 402-649-3705.