Recent surveys have shown the agriculture real estate market has plateaued.
A survey by Farmers National Company shows that comes after several years of dramatic increases in farmland values.
The senior vice-president for real estate operations for Farmers National, Paul Schadegg. said over the past few years in the Dakotas and Minnesota, farmland values rose fairly quickly, but have now leveled out.
Schadegg said farmland value is driven by commodity markets and agriculture profitability.
"We're seeing that range narrow," Schadegg said. "The commodity markets are still quite strong, although they have come down a little bit. But the inputs going into agriculture have really gone up in cost."
Schadegg said that's where people are stepping back.
"We're still seeing positive growth," Schadegg said. "But it's just not that double-digit increases we saw the last few years."
Schadegg said the Fed’s decision to raise interest rates has also put downward pressures on land prices.
"We still anticipate a strong competition for high quality land," Schadegg said. "The overall agriculture economy is still very strong. And we anticipate that to continue."
Schadegg says that will partially be driven by demand for land, plus a lack of inventory of land for sale.
