Based on Taff's research, the median sales price of farmland fell 7 percent in 2010, to $3,030 per acre. Here is the text from the article, written by Tom Webb:
"In a booming ag economy, did the price of Minnesota farmland really fall in 2010?
A new statewide survey says yes. But the numbers leave room for a debate that is sure to follow in a hundred small-town coffee shops around Minnesota. Thanks to galloping grain prices, the recent chatter in farm circles has been about the soaring price of cropland. But Steve Taff, a University of Minnesota economist, doesn't pay heed to chit-chat. Instead, he examines data from every sale of farmland across all of Minnesota, some 1,150 transactions in all.
In the first nine months of 2010, the median sales price of Minnesota farmland fell 7 percent, to $3,030 an acre, Taff found. His report was released Wednesday, and Taff knows the skeptics won't believe it.
"I think all the enthusiasm is based on a handful of sales that get repeated over and over again," Taff said. "We've got a depressed market in some parts of the state."
There are wrinkles. Regions with the most prime cropland, like south-central and southwest Minnesota, did report rising farmland prices. More dairy-intensive regions reported declines.
Plus, Taff's survey doesn't cover the final three months of 2010. Those data will come later. But the big run-up in grain prices in 2010 really didn't begin until mid-summer, so the data miss any effect.
Still, Taff knows there have been some much-talked-about farmland sales - and he can name them. An 80-acre parcel in Martin County sold for $8,000 an acre. A 40-acre parcel in McLeod County sold for $7,500 an acre, as did 80 acres in Blue Earth County. In Nicollet County, a 65-acre parcel sold for $7,000 an acre.
Those are exceptions, Taff says. Yet, they've misled landowners into thinking every parcel is selling for a record price. And that is contributing to a big drop in the number of land sales.
"People who think their land is going to sell at one of these high prices...they put up their sign, and nobody is willing to buy it at that price," Taff said. "So they take it off the market. We see kind of discouraged sellers, in some respects."
The full report is available at landeconomics.umn.edu"
After getting a full read of the article, it's easier to understand how farmland prices could be going down - the context is key. Land prices appear to be declining in the northern parts of the state; while they are still going up in our part of the state. In west central and southwest Minnesota, prices are remaining high.
If you are ready to sell your land, or would like an appraisal done to see what your land is worth, please contact me at 320-894-7528 or noah@farmlandman.com. I'd be happy to help.
Take care,
Noah Hultgren
The FarmlandMan.com
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