Source: Farmers National Co. news release
It is the time of the year to pause and reflect on the preceding 12 months in the land market. Most would agree that it was a fairly stable land market with supply and demand in fairly good equilibrium.
Various sources throughout the year reported land values up a very small percentage, or down a small amount, or basically steady.
Steady land values were the result of a continued low supply of good land for sale on the market combined with adequate demand for the right tracts. Buyers were more cautious and it sometimes took much more effort to sell a farm or ranch, but normally the sale was consummated at some point.
During the year, sellers became more realistic in their sales price expectations as the ag economy slid into the fifth year of its downturn. The slow and small interest rate increases spread over 2018 began to have some effect on buyers as they contemplated land purchases.
As we come to the end of 2018, it seems that the big questions in agriculture right now may have some effect on the land market looking ahead. A big question is will there be an increase in financially caused sales of farmland and what amount of additional farms for sale would be more than the market could absorb? Will there continue to be enough buyers to purchase what does come up for sale? Will there be future interest rate increases and by how much?
The next few months will tell us if the land market will continue much the same as it did in 2018 or if we will see it react differently to the questions facing it.