Unlocking the Value of Minnesota Farmland: A Comprehensive Guide to Current Land Prices and Expert Insights - June 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.

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 June, a total of 337  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 June sales is $6131/acre.

• The highest selling farm in Minnesota in the month of June 2024 sold on June 11th in Jackson County for $1,290,300 or $8,250 per acre for 156 acres, with a CPI of 94.3.

• The farm with the highest selling price per acre for the month sold on April 11th for $8,250 per acre for 156 acres, with a CPI of 94.3 in Jackson County, MN.

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.

June 2024 Rural Mainstreet Index Survey Results at a Glance:

• For a 10th straight month, the overall Rural Mainstreet Index (RMI) sank below growth neutral according to bank CEOs in the region.
• After 53 straight months of above growth neutral for farmland prices, prices declined for a second straight month.
• Farm equipment sales sank below growth neutral for the 12th time in the past 13 months.
• Delinquency rates for farm and business loans on Rural Mainstreet have remained virtually unchanged over the past six months according to bank CEOs.
• Only 8.7% of bankers have increased their farm loan rejection rates, while approximately 13.0% and 4.3% reported restructuring or reducing the loan-to-value ratios, respectively.
• According to trade data from the International Trade Association, regional exports of agriculture goods and livestock for 2024 year-to-date were down 4.1% from the same period in 2023.

Minnesota Specifics:

• The June RMI for Minnesota slipped to 50.2 from 51.0 in May.
• Minnesota’s farmland price index rose to 51.5 from 49.3 in May.
• The new hiring index for June was unchanged from May’s 55.3.
• According to trade data from the International Trade Association, exports of agriculture goods and livestock for 2024 year-to-date were down 12.2% from the same period in 2023.

Impact on Farmland Values

The declining Rural Mainstreet Index and the fall in farmland prices for the second consecutive month signal a potential shift in the rural economy’s landscape. Farmland values, which have enjoyed 53 months of growth, are now facing downward pressure due to several factors:

1. Decreased Export Demand: With a 4.1% drop in regional agricultural exports year-to-date and a significant 12.2% drop for Minnesota, the reduced demand for local produce and livestock affects farmers’ revenue, which in turn impacts the value of farmland.
2. Stagnant Loan Conditions: While delinquency rates for farm and business loans have remained stable, the lack of significant changes in loan rejection rates, restructuring, or loan-to-value ratios indicates a cautious banking sector, wary of extending further credit amidst economic uncertainty.
3. Falling Equipment Sales: The consistent drop in farm equipment sales highlights reduced investment in farming infrastructure, reflecting lower confidence among farmers in the economic outlook, which can further depress land values.

Why Now is a Good Time to Sell

Despite the economic downturn, there are compelling reasons why now might be a good time to sell farmland:

1. Current Market Value: While farmland prices have declined for two consecutive months, they are still relatively high, given the 53 months of previous growth. Selling now could lock in profits before potential further declines.
2. Buyer Opportunities: For investors or larger agricultural enterprises, the current dip in prices might present an opportunity to acquire land at a slightly lower cost, which can be a selling point for those looking to capitalize on long-term investments.
3. Economic Uncertainty: With the RMI continuing to fall and indicators suggesting ongoing economic challenges, selling now can mitigate the risk of further depreciation in farmland values, protecting current asset value.
4. Diversification: Farmers looking to diversify their investments or retire might find the current market conditions suitable for liquidating assets and reallocating resources into more stable or profitable ventures.

Looking Ahead: Future Projections

The Minnesota rural economy is experiencing a notable shift, with declining farmland prices and a weakened Rural Mainstreet Index. This presents a mixed landscape for farmers and investors. While the downturn might pose challenges, it also offers strategic opportunities for those looking to sell farmland. By understanding the current economic indicators and market trends, stakeholders can make informed decisions to optimize their financial outcomes.

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.