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| Photo provided by United Country-Theurer Auction/Realty |
Record Land Prices in 2013
2013 saw record land prices in Sumner County, Kansas, with
quality tillable land exceeding $6100/Acre. Pasture land and recreational land
sold in a price range of $1000-2000 / Acre. A weak recovery, which included low
interest bearing CDs, stock market volatility, PLUS speculative oil activity
all contributed to strong prices.
Significant Drop in Grain Prices
Land prices began leveling in the second half of 2013 as
interest rates moved upward slightly. However, the greatest factor affecting
land prices was significantly low grain prices – wheat prices dropped
approximately $2 / bushel while corn and milo prices dropped more than $3 /
bushel in the second half of 2013. The price drop can be attributed primarily
to large grain crops and increased supplies throughout the world.
Dr. Mike Duffy of Iowa State University states, “Land value survey shows a market influx
with strong and weak prices occurring at the same time.” Commodity prices
have adjusted downward dramatically since a year earlier due to a strong build-up
of carryover supplies. Duffy “… looks for commodity prices to remain under
pressure and for land values to adjust accordingly.”
So Where are Land Prices Headed?
My projection is prices will remain steady or slightly lower
… BUT, don’t “bet” the whole farm on my predictions. “Weird” or “unusual”
worldwide weather patterns can change the whole picture overnight. Remember,
land is still one of the best and safest investments because “they aren’t
making anymore of it.”
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