The preliminary 2013 land values survey findings show cropland cash rental rates up from 2012.
For eastern Nebraska, dryland cash rental rates average about 8% above a year ago, but rates in the rest of the state rose 5% or less.
"These increases were much below the annual rises of the past few years, no doubt reflecting the seriousness of soil moisture deficits going into the 2013 crop year," says Johnson.
Rental rates for center pivot irrigated cropland for 2013 were about 13 to 15% above a year ago. However, reported rates for above-average quality pivot-irrigated land were more than $400 across the eastern third of the state. "The value of water in rain-deficit periods, particularly with the efficiency of center pivot technology, is clearly being reflected in these rates. Rates for gravity-irrigated cropland are generally 2 to 3 percentage points lower."
Pasture rates, on a per-acre basis, moved up in 2013 in most regions. Last year's forage production shortfalls with depleted carryover stocks into this year, according to Johnson, has sharpened the market for pasture, even with lower grazing output expected this year.
On a cow-calf pair, per month-basis, rates were up from a year earlier in all regions, with most showing gains of 3 to 6%.
As Johnson reviewed the most recent report, he offered these final points:
"Comparing the recent percentage gains in value of ag land classes with the associated lower percentage gains in cash rental rates indicate a continuing pattern of lower rent-to-value ratios associated with all farmland classes, he says.
"At some point, the implied economic returns to land as a percent of value can fall to a point where market participants say 'enough' and no longer bid values higher. Here in Nebraska, we well may be soon reaching that point."