Unlocking the Value of Minnesota Farmland: A Comprehensive Guide to Current Land Prices and Expert Insights - February 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 February, a total of 2,737.44 acres were sold in Minnesota by auction method.
• The current average per acre price for land in Minnesota according to these February sales is $9,305 /acre.
• The highest selling farm in Minnesota in the month of February 2024 sold on February 23rd in Dodge County for $16,100 per acre for 153.93 acres, with a CPI of 85.8. This farm is also the highest selling price per acre sold for the month.
| County | Total Acres | $/Acre | NCCPI Soil Score | Total Price | Date Sold |
|---|---|---|---|---|---|
| Meeker | 13.85 | $14,079 | 91.5 | $194,994 | 2/29/24 |
| Brown | 83.4 | $10,000 | 79.1 | $834,000 | 2/29/24 |
| Lac qui Parle | 152.81 | $8,500 | 93.5 | $1,298,885 | 2/28/24 |
| Yellow Medicine | 196.6 | $7,450 | 92.3 | $1,464,670 | 2/28/24 |
| Yellow Medicine | 163.44 | $10,400 | 91.5 | $1,699,776 | 2/28/29 |
| Dodge | 40.25 | $15,650 | 85.1 | $629,913 | 2/23/24 |
| Dodge | 115.85 | $8,100 | 81.2 | $938,385 | 2/23/24 |
| Dodge | 76.59 | $10,500 | 87.8 | $804,195 | 2/23/24 |
| Dodge | 160.000 | $14,400 | 94.1 | $2,304,000 | 2/23/24 |
| Dodge | 153.93 | $16,100 | 85.8 | $2,478,273 | 2/23/24 |
| Brown | 106.11 | $13,000 | 93.3 | $1,379,430 | 2/21/24 |
| Freeborn | 79.61 | $6,000 | 66 | $477,660 | 2/21/24 |
| Freeborn | 70.39 | $6,000 | 55.7 | $422,340 | 2/21/24 |
| Marshall | 161.61 | $4,176 | 89.8 | $674,883 | 2/15/24 |
| Marshall | 160 | $4,531 | 88.8 | $724,960 | 2/15/24 |
| Freeborn | 75.67 | $12,000 | 84.5 | $908,040 | 2/14/24 |
| Freeborn | 116.5 | $8,600 | 73 | $1,001,900 | 2/14/24 |
| Mower | 79.78 | $13,230 | 92.3 | $1,055,489 | 2/14/24 |
| Freeborn | 20.5 | $13,500 | 94.6 | $276,750 | 2/14/24 |
| Freeborn | 72.66 | $9,250 | 84.2 | $672,105 | 2/14/24 |
| Freeborn | 73 | $5,750 | 88.2 | $419,750 | 2/10/24 |
| Steele | 111.19 | $13,900 | 93.1 | $1,545,541 | 2/9/24 |
| Clay | 140 | $5,120 | 80 | $716,800 | 2/7/24 |
| Clay | 160 | $6,110 | 85.2 | $977,600 | 2/7/24 |
| Fillmore | 98.79 | $4,500 | 26.1 | $444,555 | 2/5/24 |
| Fillmore | 12.44 | $7,300 | 74.6 | $90,812 | 2/5/24 |
| Fillmore | 17.46 | $6,200 | 70.4 | $108,252 | 2/5/24 |
| Fillmore | 25.01 | $6,200 | 59.8 | $155,062 | 2/5/24 |
| STATEWIDE AVERAGES | 97.77 | $9,305 | 81.48 | $882,108 | |
| STATEWIDE TOTALS | 2737.44 | $24,699,020 |
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.
Market Trends and Future Projections:
Minnesota Land Market Trends
Each month we like discuss current trends in Minnesota farmland sales, highlighting patterns, emerging opportunities, and potential challenges.
According to Creighton University Rural Mainstreet Index (RMI) Survey, in February, Minnesota’s RMI dropped to 42.9 from January’s 44.1, while the state’s farmland price index also declined to 55.6 from 61.3 in the previous month. However, the new hiring index saw a slight increase to 47.2 compared to January’s 47.1. According to the International Trade Association’s trade data, agricultural goods and livestock exports for 2023 totaled $1.2 billion, marking an 11.4% decrease from the $1.4 billion recorded in 2022.
In 2023, South Central and Southwest Minnesota witnessed a continued surge in farmland prices, as revealed by the University of Minnesota Extension’s comprehensive survey of farmland sales. The annual assessment, covering 14 counties in Southwest Minnesota, indicates an average price surge of 14.7% throughout the year. While Lac qui Parle County experienced a slight decline of 5.7% in farmland prices, the remaining 13 counties witnessed notable increases from 2022 to 2023. Most counties recorded significant upswings during this period, with Murray County leading the pack with a remarkable 37.1% surge in sales meeting bare farmland to non-related party transaction prerequisites.
Despite these overall increases, half of the counties observed average sales prices lower than their assessed values in 2023, with Lyon County marking the lowest percentage at 71.58%. It’s crucial to note that sales figures vary annually, with land location and quality playing pivotal roles in these fluctuations within individual counties.
Moreover, the number of sales per county fluctuates considerably from year to year. The notable 14.7% increase surpasses historical growth rates typically ranging from 1% to 2%. Various factors influence land values, including farm incomes, grain prices, interest rates, returns on alternate investments, and 1031 exchanges. While farm average incomes saw improvement between 2019 and 2022, projections indicate a decline in 2023.
The concept of 1031 exchanges particularly impacts farmland demand, as it allows farmers or landowners to defer taxes on substantial gains by reinvesting in like properties or other farmland in more reasonable price zones. The interplay of these factors contributes to fluctuations in farmland sales prices, with future trends dependent on supply and demand dynamics, as well as the comparative returns on investment.
Changes in corn and soybean prices from their highs in 2022 to their subsequent decline in 2023 are expected to affect profitability, farm rental rates, and ultimately, farmland values. Furthermore, government program payments remained minimal in both 2022 and 2023, further influencing the economic landscape of farmland transactions.
Is Now a Good Time To Sell Farmland in Minnesota?
In the predictions made by some analysts last December, there was an expectation that farmland prices might finally plateau or even decrease in 2023. Contrary to these projections, the reality has shown significant resilience in the land market, with consistently strong values being documented.
Continuing into 2024, our forecast suggests that land values in Minnesota will maintain their stability, thereby increasing the allure for prospective sellers to participate in the current market. The enduring demand for premium farmland is expected to persist, offering advantageous circumstances for those considering a sale. Seizing this moment during an anticipated period of stability empowers sellers to make informed decisions that align with the evolving landscape of the agricultural property market, ensuring optimal profits from their valuable holdings. In essence, it’s time to capitalize on the thriving market and maximize opportunities.
Future Predictions for Farmland Values
Here you will gain insights into the future of Minnesota’s farmland market with our expert forecasts. Understand what to expect in the coming months and years. Here’s what we are predicting:
Although we’ve seen steady growth year after year, there’s now a discernible plateau in farmland prices. Concurrently, the USDA-NASS reports a decline in net farm income, signaling a potential drop in cash rent values. While land prices remain stable as we enter 2024, there’s a possibility of a downturn later in the year. Various factors, including higher interest rates, lower crop prices, increased input costs, and trade barriers, present challenges to the agricultural economy and land values in the months ahead. Nevertheless, the current market still sees robust sales. It’s crucial to seize the opportunity while the market is at its peak. We acknowledge the current market conditions, and selling farmland remains advantageous at this time.
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.
Kevin Cochran, Minnesota Land Agent
Real Estate Agent
Kevin is a Minnesotan through and through, apart from stints in Seattle and New York. His decades-long career in the tech world involved supporting leading semiconductor companies and powering the tech behind cell phones, video games, computers, and other gadgets. Back in Minnesota, Kevin focused on the electrification of farm equipment and drones. On the side, Kevin cultivated his knack for home remodeling, culminating in his Home Inspector’s Certification. More recently, he acquired his FAA Part 107 Remote Pilot license and Minnesota real estate license.
Email: [email protected] | Phone: (218) 850-4946
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.