Final data on 2014 ag land value trends in Nebraska, especially the Panhandle, compiled by University of Nebraska-Lincoln. Presentation by Jessica Johnson, Extension Educator - Ag Economics, UNL Panhandle Research and Extension Center.

1. Nebraska Farm and Ranch Land
Values
Jessica Johnson
Asst. Extension Educator, Agricultural Economics
Panhandle Research and Extension Center

2. Discussion
• Land Value Trends
• Land as an Investment
• Cash Rental Rates
• Lease Agreements

3. Land Value Trends

4. Real Land Value Increase

5. Perfect storm for land value
increase
•Availability of Money – profits from farming
•Low interest rates
•Lack of land for sale
•Limited return from any other investment
•Farmers willing to expand their operations
Future?! – Bubble might deflate (not burst?)

6. Average Value of Nebraska
Farmland, % Change from 2013
Northwest
$855/ac
20%
North
$1,220/ac
20%
Northeast
$6,460/ac
4%
Southwest
$1,985/ac
12%
Central
$4,195/ac
18%
Southeast $6,185/ac
8%
East
$7,285/ac
0.3%
State
Average
$3,315/ac
9% Source: Annual UNL Nebraska Farm Real Estate Market Surveys
South $4,815/ac
9%

7. Annual Comparison
Agricultural
Statistics
District
2014 All-Land
Average Value
Dollars/Acre
2011-2012
% change
2012-2013
% change
2013-2014
% change
Northwest 855 23 13 20
North 1,220 21 20 20
Northeast 6,460 35 24 4
Central 4,195 34 27 18
East 7,285 31 18 0.3
Southwest 1,985 34 31 12
South 4,815 32 33 9
Southeast 6,185 22 26 8
Entire
State
3,315 31 25 9

8. 2013/2014 Area Land Values
Land type Northwest North Southwest
Dryland – no
potential
845 21 1720 49 1965 28
Dryland – irr.
potential
935 28 2390 24 2035 23
Grazing – tillable 550 29 1150 10 890 34
Grazing
nontillable
405 9 625 25 805 41
Hayland 1025 31 1660 44 1545 33
Gravity Irrigated
land
3040 6 4215 36 4515 17
Center pivot
Irrigation land
3770 21 4985 -5 5750 11
Source: UNL Nebraska Farm Real Estate Market Highlights 2013-2014 Pg. 6

9. Land as an Investment

10. 2014 Annual Net Rates of
Return to Land
6.2
3.5
4.0
2.1
8.3
4.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
1990 1995 2000 2005 2010
Dryland Cropland Grazing Land Irrigated Land
Nebraska Farm Real Estate Highlights Pg. 7-9

11. 2014 Land Sales
Statewide Northwest North
Cash Sales 45% 75% 50%
Mortgage 53% 23% 50%
Purchase by an Active
Farmer/Rancher
81% 54%* 83%
Out of State Buyer 5% 32%‡ 0%
Sold By Estates 41% 18% 29%
* Lowest Percentage ‡ Highest Percentage
Nebraska Farm Real Estate Highlights Pg. 11-12

12. Cash Rental Rates
UNL vs. USDA

13. Reported Cash Rental Rates: Dryland Cropland
2014 Average %
Change
High Low
Northwest 40 0 55 30
North 70 23 95 45
Northeast 245 5 305 185
Central 110 -7 170 70
East 215 -2 270 160
Southwest 50 -15 65 40
South 90 -28 125 70
Southeast 175 1 225 130
Source: Nebraska Farm Real Estate Market Highlights 2013-2014 Pg. 13

14. 2013 Nebraska Dryland
Cropland Rates Paid Per Acre

15. Reported Cash Rental Rates: Gravity Irrigated
Cropland
2014 Average %
Change
High Low
Northwest 145 b 190 90
North 205 b 260 170
Northeast 290 -9 340 215
Central 250 -4 325 190
East 315 -2 375 260
Southwest 190 -10 235 155
South 225 -18 280 180
Southeast 195 -1 355 235
Source: Nebraska Farm Real Estate Market Highlights 2013-2014 Pg. 13

16. Reported Cash Rental Rates: Center Pivot
Irrigated Cropland
2014 Average %
Change
High Low
Northwest 200 -11 240 150
North 250 -6 340 190
Northeast 370 -2 445 315
Central 260 -33 280 220
East 355 0 425 290
Southwest 305 13 345 255
South 270 -14 335 240
Southeast 335 -3 415 265
Source: Nebraska Farm Real Estate Market Survey 2013-2014 Pg. 13

17. 2013 Nebraska Irrigated
Cropland Rates Paid Per Acre

18. $0.00
$50.00
$100.00
$150.00
$200.00
$250.00
RentPerAcre
Cash Rental Rates for the Northwest District
Dryland Gravity Irrigated Center Pivot Irrigated

19. Reported Cash Rental Rates 2013:
Pasture
Average %
Change
High Low
Northwest 10 -23 15 5
North 25 56 35 15
Northeast 70 32 100 55
Central 30 -14 45 25
East 55 12 70 45
Southwest 20 18 30 15
South 35 -5 50 30
Southeast 50 19 65 40
Source: Nebraska Farm Real Estate Highlights 2013-2014 Pg. 13

20. 2014 Pasture Rents – by cow/calf
pair per month
Northwest North Southwest
Average 32.30 48.55 45.45
High 43.55 69.45 59.45
Low 29.15 39.65 39.90
Source: Nebraska Farm Real Estate Market Highlights Pg. 14

21. 2013 Nebraska Pasture Rent
Paid per Acre

22. Cash Rent Summary
• Note Differences in numbers
• NASS survey
• UNL Cash Rent survey
• Coffee Shop
• Cash rents clearly up recently – but don’t always
trend with land values (10% vs 20+%)
• Rents are still determined by supply and
demand
• Tenants need to sharpen the pencil
• Landlords need to be understanding

23. Rental Rate Secret
WHATEVER THE LANDLORD IS
WILLING TO ACCEPT AND THE
TENANT IS WILLING TO PAY

24. Lease Agreements

25. Components of Good Leases
• They are written – not verbal or handshake
– Terminating handshake or verbal leases
• Needs to be done by 9/1 of any year for the next
year
• Termination notice is done by writing (Certified Mail)
• Good Communications
• TRUST
• Use of good practices
• Put the land resource first
• Sub-leasing allowed?
– Cropland, stalks, or hay
– Hunting?

26. Quick calculation of farmland
leases
• Roughly 30% of the gross income should
go to landlord
– Comes from 30-70 split of crop share lease
• 180 bu. Corn times $4.25 per bushel is
$765 gross per acre
• $765 gross times 30% equals $230 per
acre rent
– Assumes the following
• Yield is APH
• Price is Fall ‘14
• % can vary by crop and location in Nebraska

27. Pasture Leases
• Runs from May 1 to October 1 (5-month
period)
• Includes the legal description of the land
• Shows in and out dates
• Describes penalties for early in or late out
• Describes when payments are due and
how
• How are typical leases
established/terminated?
– Verbal
– Written

28. Pasture Lease Considerations
• Stocking rate by head, AUM, pairs,
frame, weight, color…
– Pasture inspection: owner, 3rd party…
• Termination provisions
• Contingency provisions
– Owner’s death
– Tenant’s death
– Sale
– Disaster occurrences
• Drought or grass loss
• Fire – or other

29. Determining Pasture Rents
• From per acre to per pair/month
Assume going per acre rent in SB county is $10
– Scotts Bluff County = 18 acres/pair for 5
months
– 500 acres = 28 pairs
– 500 * $10 = $5,000 rent/28 pairs =
$178.57 season or $35.71/pair/month
• 2. Return on Investment
– % ROI X Land Value = Rent
– 3% return X $475 value =$14.25

30. Resources
• UNL Nebraska Farm Real Estate Survey
http://agecon.unl.edu/realestate.html
Updated in June
• http://AgLease101.org
– Example Written Lease Agreements
• USDA NASS NE Office, Charts & Maps
http://www.nass.usda.gov/Statistics_by_State/Nebraska/Charts_and_Maps/
Updated every September
– Dryland Cash Rental Rates
– Irrigated Cash Rental Rates
– Pasture Cash Rental Rate

31. Office: 308-632-1247
go.unl.edu/pagecon
jjohnson@unl.edu
PanhandleAgEcon
Extension is a Division of the Institute of Agriculture and Natural Resources at the
University of Nebraska-Lincoln cooperating with the Counties and the U.S. Department of
Agriculture.
University of Nebraska-Lincoln Extension educational programs abide with the non-
discrimination policies of the University of Nebraska-Lincoln and the United States
Department of Agriculture.
Get current Panhandle price & basis information
TEXT “@UNLPREC” to 651-968-8358
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