Land Value: Strong Demand For Ag Land
SPOKANE, Wash.-Demand for good quality agricultural land remains strong throughout the Northwest. Values as a whole are stable to increasing. Commodity prices are high and interest rates are low which have driven farm expansion and increased rents. Competition has increased in many areas of the Northwest. Experts believe 2012 will have similar sales transactions as 2010 and 2011.
Northwest Farm Credit Services survey is based on real estate and sales activities that are monitored by Northwest FCS appraisers throughout Idaho, Montana, Oregon and Washington. The limited supply of agricultural properties has caused rapid increases in land values and rents in areas of Eastern Washington and Southern and Eastern Idaho. Higher than average farm earnings may make individuals reluctant to sell, creating additional supply constraints within the agricultural market segment. Commodity prices continue to fluctuate, with a favorable outlook for 2012 for most crop and livestock prices. Regional observations shared by appraisers during the first half of 2012 include:
Idaho: Land values appear to be stable to strong across most of Idaho. Historically high commodity prices continue to fuel optimism in the agricultural market with buyers typically being well-established operators. In Southern and Eastern Idaho, area operators are still very eager to expand and are willing to pay more for farms with lower quality soils and lower production levels. Demand for good quality irrigated lands remains strong in Western Idaho.
Montana: Interest in productive agricultural land continues to be strong. Market activity throughout Montana in 2012 is similar to 2011. Market activity in Western and Southwestern Montana continues to be relatively slow. Central and Eastern Montana sales and pending sales of very large average to above average ranch properties are trading near or above historical values with some larger sales well over $10 million.
Oregon: Demand for good quality agricultural land remains high in many areas of Oregon. Favorable commodity prices for many crops have increased market activity and demand from agricultural producers throughout the state. Agricultural properties continue to experience relatively stable to increasing land prices. The weak economy and housing crisis continue to impact the demand for timber and nursery markets in Western Oregon.
Washington: Market sales activity for Washington has been stable to increasing. Sale prices for many land classes are at record levels. Institutional investors and large farmers continue to show strong interest in larger properties with good production histories. Strong commodity prices and low interest rates continue to support land prices throughout Washington.