Farmland Prices Nearly Double in IA, NE - Siouxland News - KMEG 14 and FOX 44

Farmland Prices Nearly Double in IA, NE

(LE MARS, IA) - Farmers across America are getting record prices for their land. The average price of farmland in Iowa and Nebraska has doubled since 2009, but a changing tax law could put the breaks on that.

Crops were scorched last summer in Siouxland, but that didn't stop farmland prices from hitting high. You'd imagine farmers may want to take advantage of the steep prices and sell their land, but that's not what experts are saying.
 
"Yes land is strong now, but I don't see it continuing to do this. (points arm up) Flatten out is more likely," said Dan Kriener, President of Kriener Farm Management Inc. 
 
Kriener works with farmers on a daily basis to help them buy and sell land. He said he did see a number of farmers sell their land in late 2012 mostly to avoid an increase in capital gains taxes.
 
"Generally the ones who have owned land for a long time have a low tax basis and so it's not advantageous for them to sell from the capital gains tax standpoint," said Kriener.
 
"They have no place to put their money. They can't afford the taxes that it's going to cost. So we're just not going to get the elderly, the retired to move their ground," said Chuck Kellen, a crop insurance agent for Mark Crop Insurance.

Kellen said a bunch of farm owners just came through his office looking to retire. None of them were willing to sell their land.
 
"But again we're back to the tax ramifications of selling ground," said Kellen.
 
Over the last several years ethanol production boomed across the Midwest, going from two billion to 13 billion gallons a year.
 
"But since then, that capacity now is full and so we're not increasing the demand, but we're still grinding a lot of corn for ethanol." said Kriener.
 
Maybe only a certain kind of land owner would be willing to sell with the high prices now.
 
"The primary issue would be estates to where the kids maybe live a ways away from the farm and they see this as a good opportunity to sell their land," said Kriener.
 
Just because you heard someone sold their land for $20,000 an acre, doesn't mean that's the standard.
 
"It's just not consistent. Farmland values are not at $20,000. Are there isolated cases of $18,000 and $20,000 ground? Yes. The predominant number is in that $13,000, $14,000, $15,000 range," said Kellen.
 
As for the future, both Kellen and Kriener agreed farmland values could go back down or they could continue to rise.

Along with the rise in prices has come more debt. The nation's farmers now owe $277 billion. That's up 30 percent since 2007.

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