Northwest Farm Credit Services land sales surveys in the West show some strong sales and high prices for Montana, Oregon, Washington and Idaho.
"Demand for good quality agricultural land remains strong throughout the Northwest," says NFSC. "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, the bank adds, noting that competition has increased in many areas of the Northwest for land. Experts believe 2012 will have similar sales transactions as 2010 and 2011.
NFCS's survey is based on real estate and sales activities that are monitored by the bank's appraisers in the four states. The limited supply of ag properties has caused rapid increases in land values and rents in areas of eastern Washington and southern and eastern Idaho, they report.
Higher than average farm earnings may make individuals reluctant to sell, they note, creating additional supply constraints within the ag market segment. Commodity prices continue to fluctuate, with a favorable outlook for 2012 for most crop and livestock prices.
Regional observations shared by the appraisers during the first half of 2012 include:
IDAHO: Land values appear to be stable to strong across most of the state. Historically high commodity prices continue to fuel optimism in the ag market with buyers typically being well-established operators. In southern and eastern Idaho, operators are still very eager to expand and are willing to pay more for farms with lower quality soils and lower production levels.
MONTANA: Interest in productive ag land continues to be strong. Market activity throughout the state in 2012 is similar to that of 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 area trading at near or above historical values with some larger sales over $10 million.
OREGON: Demand for good quality ag land remains high in many areas of the state. Favorable commodity prices for many crops have increased market activity and demand from ag producers throughout the state. Ag properties continue to experience relatively stable to increasing land prices. The weak economy and housing crisis continue to impact demand for nursery markets in western Oregon.
WASHINGTON: Market sales activities have been stable to increasing. 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 the state.