“The overall theme continues to be limited supply and strong demand in the Mid-South as it has been in many areas across the US. In the recent USDA Land Values report it was reported that land values had seen a year over year increase about 2.2%. However, when you look at irrigated land and those with high class soils the year growth pushes 3% with some isolated markets higher. High quality properties are in strong demand and move very quickly, if priced properly.
Recent sales have brought a range of $5,000 to $6,000 for premium properties. These properties area almost always 100% irrigated and highly improved. The prices then fall off beyond that by some 15% to 20% for irrigated ground that needs further improvements and discounted again for unimproved dryland farms.
We should begin to price adjustments made on properties who have been exposed to the market for an extended amount of time. This adjustment may very well be interpreted as a weakening market, which can be misleading. These properties are marginal and require extensive improvements and were not priced to reflect true market prices.
While there are some purchases being completed by farmers in local areas those transactions have been limited. Most of the demand is coming from investors seeking to continue to build to their agriculture holdings in the area or enter the Mid-South for the first time.”