The Indications are that land auction activity will be good during the 2022 pre and post-harvest sales seasons. With the normal slowdown of land sales during spring planting and the early summer period coming to an end, booking of auctions for late summer through the fall time frame is picking up at Farmers National Company.
The number of sales and amount of land sold from now until the close of 2022 will probably not equal the very active land market experienced in the last few months of 2021. Quite a bit of additional selling then was prompted by anticipated tax law changes coming in the following year which would have raised taxes and lowered the net received from a sale or estate plan. Sales activity will more than likely exceed what was seen during the slower land market years of 2015 to 2020.
Several reasons are prompting landowners, typically estates, trusts, and recent inheritors, who had been thinking about selling their land to move ahead with the sale sooner than later. Number one would be the historically high sales prices at this time in the market. High prices normally bring out more sellers. Another factor influencing when to sell for landowners is the huge amount of uncertainty in several factors that influence land values. One of the uncertainties is interest rates, how high and how soon will rates move up. Shorter-term uncertainties include weather, 2022 yields, and what farm incomes will look like at the end of the year.
A number of additional landowners are making the decision to sell in 2022. This is increasing the sale activity outlook for the next few months. The demand or buying side of the equation has been holding up well with farmer and investor interest remaining strong, but time will tell if factors in the ag and general economy will change the demand for land.