CHAMPAIGN, Ill., Dec. 19, 2014 /PRNewswire/
— When it comes to farmland prices, the only certain thing about 2015 is that it will be unlike any year we’ve seen in a while, according to farmland authority Murray Wise, president of Murray Wise Associates.
“This year has been one of transition, with prices varying widely depending on land quality and location. The market has been rewarding the more productive land, but buyers have been less enthusiastic about lower quality land in poorer areas. As to the overall direction, I think we’ll start to get more clarity in the coming months, especially in the Corn Belt,” said Wise.
Low commodity prices have put downward pressure on the market in the Midwest, but Wise said that’s only one of many factors expected to influence next year’s land prices.
“Commodity prices vary a lot year to year, and farmland buyers generally are thinking in terms of a time frame that’s 10 years or longer. So today’s low corn prices are just one of many factors — and a short term one at that,” said Wise. Other considerations include interest rates and the availability of alternative investments. Even international developments play a role, including output of other countries and the Chinese government’s policies for allowing the import of genetically modified crops.
One notable exception to the cloudy and mixed outlook is Florida, where Murray Wise Associates has sold almost 12,000 acres during the past 24 months.
“All the elements are in place for Florida farmland to continue to do well, because the demand is really strong relative to the amount of land being offered. We’re seeing strength in all types of Florida farmland — groves, row crops, pasture and woodland,” said Wise. He said Murray Wise Associates will continue to be active in the state.
Recreational land is also showing a comeback, with prices improving and Murray Wise Associates auctions drawing strong crowds in the Midwest and Southeast during 2014. “We’re seeing prices at pre-recession levels, and we’ve had very active bidding at every sale,” said Wise.
SOURCE Murray Wise Associates