Demand for U.S. Farmland Hits Record Highs as Supply Sinks to Historic Lows

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“There are a number of factors driving this increasing demand, which we see continuing into 2011,” said Lee Vermeer, AFM, vice president of real estate operations at Farmers National Company. “Jumps in commodity prices are increasing profitability of land

Omaha, NE (PRWEB) January 14, 2011

Demand for U.S. farmland has jumped to a five-year high, spurred on by a profitable grain market and a boost in buyer interest from both farm operators and land investors. While demand rose sharply during the last quarter of 2010, the supply of available farmland fell to historically low levels.

“There are a number of factors driving this increasing demand, which we see continuing into 2011,” said Lee Vermeer, AFM, vice president of real estate operations at Farmers National Company. “Jumps in commodity prices are increasing profitability of land as an investment. Landowners are using the profits to increase land acquisitions. They are investing in their own operations as land values are stabilizing, and in many cases, increasing.”

Vermeer said that while increasing values are boosting the interest in farmland by investors, farm operators account for 85 percent of buyers.

“Farmland purchases have also become an attractive investment for non-operators in this environment,” said Vermeer. “It’s definitely showing a more favorable return on investment than traditional investments like the stock market and CDs.”

For more information on land listings in your region, visit the Farmers National Company website at http://www.FarmersNational.com or go to http://www.alberscommunications.com/mediacenter/farmers-national.

Farmers National Company, an employee-owned company, is the nation’s leading agricultural real estate and farm and ranch management company. The company has sold over 2,600 farms and more than $1.25 billion of real estate during the last four years. Farmers National Company currently manages more than 5,000 farms in 23 states. Additional services provided by the company include appraisals, insurance, consultation services, oil and gas management, lake management and a national hunting lease program.

Many Absentee Landowners Sell Land Below Market Value

There are a significant number of landowners benefitting from the recent jump in farmland values. However, there is a segment of absentee landowners that is missing out on maximum profits due to a lack of market understanding, according to agricultural real estate experts who track market activity.

As land values move up quickly, many absentee land owners are falling behind the curve in private property sales. According to Lee Vermeer, AFM, vice president of real estate operations at Farmers National Company, nearly 20 percent of private treaty sales transactions are in this category. He says the numbers keep increasing and the gap widening as values in the open market are rising.

“Our appraisers come across numerous sales in almost all states and counties that have sold well below the current market,” said Vermeer. “Examples of farms that have sold at $500 to $1,000 per acre below the market are common and instances of $2,000 below the market have been found. If a landowner sells 160 acres at $1,000 below what they could have received if offered to the open market, they will lose $160,000. This scenario happens often in this rapidly changing market.”

Vermeer advises absentee landowners to keep current on market trends and sales data, even if they are not currently looking to sell. He says it’s vital to seek regular advice from a professional land real estate company, and track state and county sales online at a website such as http://www.FarmersNational.com where landowners can keep apprised of market changes that affect land they own.

“You never know when an opportunity to sell could arise, and knowing the market puts a landowner in an optimum position, and knowledge is always valuable,” said Vermeer.

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