USDA numbers show American farmland fell by nearly two million acres last year.
An Illinois farmland broker explains what the market looked like historically versus today.
“Very similar, but historically and today, it’s a very low turnover rate. A statistic I saw recently for Illinois was last year we saw a 1 percent change or turnover in ownership, and that’s pretty common for the Midwest. The majority of farms that we see selling are due to estates being closed down, trust being liquidated, and that’s about it,” Eric Sarff explains. “Typically, farmland gets passed down from one generation to the next and doesn’t ever come up for sale. As we see more land continuing to get taken out of production, that just puts more of a premium on the ground that comes to the market. Even when we were maybe a little bit of a softer market in 2017 through 2019, demand was still strong because the supply was still so low. When something comes on the market, we still see a lot of demand for those properties.”
Since 2000, the data shows 50 million acres of farmland have been lost across the U.S, which comes out to a rate of more than four acres every minute of every day.
However, there are some ag real estate deals out there.
“There’s still a lot of demand from all classes of buyers, from farmers and local investors all the way up to the large institutional buyers. Values are holding strong despite raising interest rates. We’ve had multiple sales where we’ve had 30 plus bidders registered for a sale, and that’s, to be honest, stronger than we’ve probably ever seen, and we’ve had up to 50 vendors in a room, and some of that’s due to offering online bidding now, which makes a lot more convenient for bidders. The result is the same. The demand is extremely strong still for farmland. In the Midwest, we’ve had good sales, and in other parts of the U.S. as well, and demand is really strong across the board,” he adds.
