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ROCHESTER, Minn. 鈥� According to one of the nation's largest farmland brokers, the farmland market has remained resilient halfway through 2024. 

A lot has changed in the past year in terms of commodity markets, interest rates, buyer demand and overall agricultural economy, said Paul Schadegg, senior vice president of real estate operations at Farmers National Company. 

鈥淢oving into the second half of 2023 and the first half of 2024, we鈥檝e experienced significant increases in interest rates, declining grain markets, and inflation," Schadegg said. "Despite these negative pressures, the land market has remained relatively resilient but shows signs of settling in general, including single-digit decreases in specific areas.鈥�

Farm operators remain to be the largest segment of land buyers, Schadegg said, therefore the "biggest impact on land values moving forward will be profitability in agriculture."

鈥淔armers National Company and our agents continue to see strong demand for real estate services across our marketing regions. Listing volume and closed transactions at the company match the pace we saw in 2023, with activity and interest building into the fall selling season," Schadegg said. "The listing volume and transaction results remain well ahead of the company鈥檚 5-year average."

Thomas Schutter, area sales manager for the central region for Farmers National Company, gave a landowner presentation in Rochester on July 23. 

Schutter said despite a downturn in grain markets and rise in inflation, land values have remained solid so far in 2024. 

"It's kind of amazing that in the last two years we've been talking about this downturn that's coming in the land market, and honestly, we just haven't gotten there," Schutter said. "Land is a solid asset, and has been resilient."

Due to the prolonged higher interest rates and lower commodity prices, Farmers National Company has seen more pressure on values in the last six months, with the lower quality and marginal land receiving the most scrutiny, said Schutter. 

鈥淗igh-quality land remains the most stable, with strong sales still reported in some areas," Schutter said. "One saving grace for values is that we鈥檝e seen a lower land supply on the market this spring. This may have helped stabilize values for a time, but we anticipate that volume will increase through the remainder of the summer months and into the fall."

While buyer interest has varied lately, Schutter said that overall buying power is down from its peak two years ago.

鈥淭hat doesn鈥檛 mean buyers are no longer interested but are more selective in their purchases," he said. "Heavy spring and summer rainfalls have also taken an emotional toll on some local buyers, especially in northwest Iowa and southwest Minnesota, where flooding is most prevalent."

When evaluating land sales this spring and looking ahead to the fall of 2024, one constant will remain the same 鈥� "quality is king," said Troy Swee, area sales manager for the northern region for Farmers National Company. 

鈥淥n average, we have seen a softening in land sales since the uptick in interest rates and the downturn in commodity prices, but demand for high-quality land remains extremely strong and is still bringing at or near record high prices,鈥� Swee said. 

Some examples of this would be 160 acres in Polk County, Minnesota, that brought $1,408,000 ($8,800 per acre), and the 800 acres in Aurora County, South Dakota, that brought $6,336,000 ($7,920 per acre). 

"A lack of inventory for sale also supports land values across the region, and our auctions have been very well attended with plenty of farmers and investors looking to add to their land portfolio,鈥� Swee said.