Unlocking the Value of Minnesota Farmland: A Comprehensive Guide to Current Land Prices and Expert Insights - August 2024 Report
Welcome to Our Monthly Minnesota Farmland Value Report
In this monthly report, Jason Smith, Land Broker and Auctioneer dives into Minnesota farmland values, helping you understand the factors that determine what your farm is potentially worth. Our goal as auctioneers and farmland real estate agents is to provide you with up-to-date information, recent sales data, expert insights, and tips for maximizing the potential value of your farmland sale. Let us answer the questions you have about selling farmland in Minnesota. Contact us today for a free consultation.
Jason Smith, Broker | Auctioneer
Founder, Farmland Auctioneer & Land Broker
Jason is an experienced farmland broker and auctioneer with extensive experience in farmland sales across this Midwest. Jason has worked with hundreds of clients to create advantageous outcomes. If you are selling land schedule a consultation with Jason by calling or using the calendar.
Email: [email protected] | Phone: 515-537-6633
Understanding Minnesota Farmland Values:
Factors Influencing Farmland Values in Minnesota
Minnesota’s agricultural landscape is influenced by a multitude of factors. In this blog, we will explore how commodity prices, interest rates, government policies, and regional conditions impact the current market values.
Recent Farmland Sales Data
Let’s dive into the latest sales data, including county location, land size by acre amount, soil productivity ratings, and sale prices per acre and total price in the table below. By analyzing this data, you can get a clearer picture of how your property may be valued in the current market.
Average Price of Farmland in Minnesota
• In the month of August, a total of 839 acres were sold in Minnesota by the auction or private listing method.
• The current average per acre price for land in Minnesota according to these August sales is $6192/acre.
• The highest selling farm in Minnesota in the month of August 2024 sold on August 28th in Stevens County for $1,800,000 or $11,650 per acre for 157 acres, with a CPI of 59.
• The same farm was also the highest selling price per acre for the month.
| Date Sold | County | Total Price | Total Acres | $/Acre | Tillable Acres | $/Tillable Acre | Soil Score | Primary Crop (2023) |
|---|---|---|---|---|---|---|---|---|
| 08/28/2024 | Stevens | $1800000.00 | 157.37 | $11650.00 | 142.00 | $12676.06 | 59 CPI | Corn |
| 08/26/2024 | Stevens | $925700.00 | 153.85 | $6050.00 | 143.00 | $6473.43 | 79.7 CPI | Soybeans |
| 08/26/2024 | Grant | $1100000.00 | 236.31 | $4750.00 | 224.01 | $4910.50 | 64.6 CPI | Soybeans |
| 08/20/2024 | Sibley | $577185.00 | 54.97 | $10500.00 | 50.40 | $11452.08 | 91.9 CPI | Corn |
| 08/14/2024 | Otter Tail | $94380.00 | 14.30 | $6600.00 | - | - | 40.6 CPI | Grassland/Pasture |
| 08/14/2024 | Kittson | $102000.00 | 80.00 | $1275.00 | 30.00 | $3400.00 | 43.9 CPI | Grassland/Pasture |
| 08/13/2024 | Otter Tail | $43500.00 | 30.00 | $1450.00 | - | - | 25.1 CPI | Grassland/Pasture |
| 08/12/2024 | Kandiyohi | $424586.43 | 62.43 | $6801.00 | 55.00 | $7719.75 | 92 CPI | Soybeans |
| 08/12/2024 | Kandiyohi | $53300.00 | 10.20 | $5330.00 | 9.65 | $5523.32 | 92.5 CPI | Alfalfa |
| 08/09/2024 | Swift | $289800.00 | 40.25 | $7200.00 | 39.14 | $7404.19 | 89.2 CPI | Corn |
| Total | $5410451.43 | 839.68 | $6192.17 | 693.2 | $7444.92 |
Call us about selling your Minnesota land at (218) 297-5779. We can help you safely transition your land ownership using a private sale, public auction or even a private land auction.
August 2024 Rural Mainstreet Index Survey Results at a Glance:
• For a 12th straight month, the overall Rural Mainstreet Index sank below growth neutral, according to bank CEOs in the region.
• For the third time in the past four months, farmland prices sank.
• Farm equipment sales sank for the 13th straight month.
• Farm loan delinquency rates over the past six months climbed by an average of 1.1% across the region.
• According to trade data from the International Trade Association, regional exports of agriculture goods and livestock for 2024, year-to-date, were down by $78.9 million, or 1.3%, from the same period in 2023.
Why Today is still a Good Time to Sell Farmland in Minnesota
The August 2024 Rural Mainstreet Index (RMI) report presents a challenging picture for the agricultural sector in Minnesota and across the region. For 12 consecutive months, the RMI has remained below growth neutral, signaling economic contraction. Farmland prices have continued their downward trend, farm equipment sales are in a slump, and farm loan delinquency rates are on the rise. Despite this, there are still compelling reasons why selling farmland in Minnesota now could be a strategic decision for many landowners. Here’s why:
1. Farmland Values Are Still Historically Strong
While the recent RMI report shows a dip in farmland prices, it’s important to remember that these values are coming off historic highs. Over the past decade, farmland in Minnesota has seen substantial appreciation, driven by increased demand for agricultural commodities, low interest rates, and investor interest in land as a stable, long-term asset. Even with the recent downturn, many sellers can still capitalize on high values compared to historical norms. The current dip may only represent a short-term adjustment in a longer upward trend.
2. Limited Supply Can Keep Prices Competitive
Despite softening prices, the demand for quality farmland remains strong, particularly as the supply of available land is limited. Land isn’t easily reproduced, and its scarcity continues to bolster its value over time. Buyers looking to expand their farming operations or investors seeking to diversify their portfolios are still active in the market, especially for properties with good soil, favorable location, and potential for alternative uses such as solar farming or conservation programs.
3. Alternative Uses and Incentives for Farmland
Minnesota is increasingly becoming a hub for sustainable agriculture and renewable energy projects. The state government and private entities are offering financial incentives for converting farmland to solar farms, pollinator habitats, or other eco-friendly initiatives. Selling your land to developers or investors looking to capitalize on these emerging opportunities could increase the value of your property, even in a sluggish agricultural market.
Additionally, there is ongoing interest from conservation groups and government programs aimed at preserving land for ecological purposes. These buyers are often less influenced by short-term agricultural market fluctuations and are willing to pay a premium for land with ecological value.
4. Interest Rate Trends and Financing Opportunities
While farmland prices have softened, interest rates, although higher than in previous years, are expected to stabilize or even decrease slightly as inflation pressures ease. This could bring new buyers into the market, creating a more favorable selling environment for those looking to offload property. For buyers who had been priced out of the market due to high land prices and low interest rates, the current scenario might offer an attractive window to make a purchase, creating an uptick in demand that benefits sellers.
5. Liquidity in Uncertain Times
With rising farm loan delinquency rates and economic pressures on farm operations, selling now could provide crucial liquidity for landowners. Holding onto farmland while waiting for prices to recover might expose sellers to financial risks if market conditions continue to worsen. By selling in the current market, landowners can take advantage of still relatively high prices, converting land into cash to reinvest in other ventures, pay down debt, or secure financial stability during a period of economic uncertainty.
6. Opportunities for Buyers to Diversify
Despite the downturn in the Rural Mainstreet Index, farmland remains a valuable asset class, especially for investors seeking to diversify away from more volatile markets like stocks or cryptocurrency. Agricultural land offers long-term stability, and with recent price dips, some buyers may see this as a buying opportunity, keeping demand relatively stable for well-positioned land.
Conclusion: Timing Can Still Be in Your Favor
The Rural Mainstreet Index’s recent downturn and its impact on farmland prices might make it seem like now is not an ideal time to sell, but market conditions tell a more nuanced story. Historical highs in farmland values, limited supply, alternative uses for land, and liquidity considerations all make selling farmland in Minnesota a smart move for those looking to capitalize on their investment.
For landowners on the fence, assessing personal financial goals and market opportunities is key. Despite the challenges outlined in the RMI report, strategic sellers can still find buyers willing to pay competitive prices in this ever-evolving market.
Navigating the Selling Process:
Tips for Selling Your Farm in Minnesota
Explore a set of practical tips for successfully selling your farmland by downloading our free eBooks here. Schedule a non obligatory consultation with us today and we will cover everything from when is the best time to sell, a customized marketing plan, sales methods, how we can help you find the right buyer, and answer your questions.
Farm Real Estate Experts in Minnesota
Meet our team of Minnesota farm real estate and auction experts who can provide you with valuable guidance and personalized assistance throughout the selling process. If you’re looking to uncover the true value of your Minnesota farm or are considering selling, don’t hesitate to reach out to our experienced team. We’re here to provide you with a customized plan to meet your goals. Contact us today to get started.
Assessing Your Farm’s Worth:
Minnesota Land Market Analysis Appraisal Technique
Curious what your farm could sell for? We prepare market analysis for each of our farmland sellers to help you discover and learn what your farm is worth from our market based research and expertise. Fill out our form here to request a market analysis of your Minnesota farmland or call us at 507-769-0128.