FARGO, N.D. - North Dakota farmland sale values declined by 3 percent in 2017, following 8 and 9 percent annual declines for the prior two years, respectively, according to an annual ag land survey.
Ag land prices in the Red River Valley on the eastern side of the state declined by 9 percent in 2017, while values elsewhere ranged from declines of 2 percent to increases of 3 percent, the report from North Dakota Chapter of the American Farm Managers and Rural Appraisers said.
Thirty-four professionals reported sales and rental data based on actual 2017 sales and new or existing multi-year cash rental contracts. The report notes that there can be significant variations in physical characteristics of land within counties.
Dwight Hofland, a member of the chapter and senior land manager with Pifer's Auction & Realty in Moorhead, Minn., offered the chapter's customary "member summary" of the market that goes with the report.
Hofland said the price levels of "productive crop and pasture land in North Dakota regained some strength in 2017" and likely established a "firm floor on land values." He said investors and farmers with strong balance sheets continue to purchase land to add to their portfolios. Land inventories are starting to "tighten going into 2018," he said.
Pasture and marginal land also strengthened "due to the dry condition in the western Dakotas," Hofland said. Market conditions that could affect values in 2018 include drought, interest rates, tight profit margins, global commodity demand and trade relationships.
Land rental rates are a "lagging indicator and often are behind the land real estate markets," he said. Some producers were able to market commodities during an "uptick in the markets this summer prior to harvest."
"Farmers continue to be aware of their fixed costs and targeting variable costs to cut overhead," Hofland wrote. Rental rates continued to be "volatile" with "high demand for quality land" and "a tightening of available rental acres which in turn holds rental rates at arbitrarily high levels."
Here are details on 2017 transactions by region, all expressed as dollars per acre:
Red River Valley
Red River Valley land in six counties saw a mean average price lows of $3,027 per acre in eastern Walsh County to a high of $4,634 in eastern Cass County.
Cass had 49 sales ranging from $3,112 to $5,549 per acre with the mean of $4,634 and a median of $4,516. Grand Forks County saw a range of $1,864 to $5,675 per acre, a mean of $3,791 and a median of $3,425. Traill County had 87 sales, ranging from $1,299 to $6,510 per acre, with mean of $4,038 and a median of $4,167. Richland County had 18 sales ranging from $2,027 per acre $5,333, with a mean of $3,810 and a median of $3,794.
Cropland cash rents ranged from $75 an acre to $225 in eastern Cass County, the highest in the valley, and ranged from $60 to $200 in the three lowest counties in Traill, Pembina and eastern Walsh Counties.
A dozen southeastern North Dakota counties, including western Cass County and Sargent County to the Missouri River, included a wide range.
Western Cass land prices were highest, with 41 sales ranging from $2,551 an acre to $5,276 per acre, with a mean average of $4,118 and median of $4,107. Next highest was Sargent County, with six sales ranging from $3,000 per acre to $4,276 per acre, with a mean of $3,700 per acre and median of $3,621.
Other county mean average cropland sale prices were Barnes, $3,006 per acre; Burleigh, $1,878; Dickey, $3,193; Emmons, $2,540; Kidder, $1,713; LaMoure, 3,141; Logan, $1,745; McIntosh, $2,312; Ransom, $3,500; and Stutsman, $2,417.
Stutsman County had the most cropland sales at 59, ranging from $1,100 to $3,764, with mean of $2,417 per acre and median of $2,457.
Pasture land sale prices averaged up to $1,398 per acre for a single sale in Sargent County to a low of a $779 average in Barnes County based on five contracts.
LaMoure County showed the top crop land cash rents, with a range from $50 per acre to a high of $185. Western Cass, Ransom, and Sargent counties all saw cash rent highs of $170 to $175. Kidder County had the lowest crop land price range from $28 per acre to a high of $70.
Pasture rents in the area started at $15 to $20 per acre and went as high as $70 in LaMoure County and $60 in McIntosh County. Western Cass and Kidder County had the lowest top rate at $30 per acre for pasture land.
Ten northeast counties (and partial counties) outside the Red River Valley saw mean average, non-irrigated cropland prices ranging from a low of $1,464 in Benson County to a high of $3,575 in Steele County. Transaction numbers ranged from a low of five transactions in western Walsh County to a high of 71 in western Grand Forks County.
Steele County had 45 transactions ranging from $1,607 per acre to $6,148 per acre, with mean average of $3,575 per acre and a median of $3,668 per acre. Next highest in mean averages were western Grand Forks, $2,688 per acre; Cavalier, $2,561 per acre; and Wells, $2,247 per acre. Cropland cash rents were highest in Steele County, ranging from $65 an acre to $180, followed by ranges up to $135 per acre in western Grand Forks, and Griggs counties, and $120 per acre in Foster and Walsh counties. The lowest cropland rent ranged up to $80 in Benson County, with Eddy and Nelson counties posting up to $80 for highs.
These 12 counties are southwest of the Missouri River and south of McKenzie County. Cropland sales ranged from as few as two in Mercer County to as many as 16 sales in Grant County.
Mercer had the highest prices, with sales ranging from $1,309 to $3,783 per acre, and mean and median averages of $2,546. Next highest was Morton County, with 11 sales ranging from $1,229 per acre to $2,961 per acre, a mean average of $1,947 and median of $1,923 per acre. Oliver County had five sales ranging from $1,072 per acre to $2,849 per acre, with a mean of $1,496 and median of $1,488 per acre.
Pasture land prices had mean averages up to $1,372 in Morton County, and $1,342 in Mercer County, to a low of a $670 average in Billings/Golden Valley counties.
Cropland rental rates showed lows in the $25 to $35 in all counties. Rates ranged up to $75 in Morton, Oliver, and Stark Counties, and $65 for Adams, Billings, Bowman, Dunn, Grant, Hettinger, Mercier, Sioux and Slope counties. Golden Valley had the lowest top rate of $50 an acre.
Pasture rents ranged from a lows mostly in the $15 to $20 range, to highs of $45 per acre in Morton and Oliver counties and $40 an acre in Stark County. Most other counties in the region topped out at $30 to $35 an acre.
These 13 counties cover much of the state north of the Missouri River and showed per-county land sale numbers of two in McKenzie County to 28 in Ward County.
McLean County had 19 transactions ranging from $1,300 per acre to $5,572, topping the mean averages with $3,099 and the median of $2,900 per acre. Next in line was Ward County, with a range of $932 per acre, a high of $2,726 and the mean average of $2,115 and median of $2,258.
Other county per-acre mean averages were Bottineau, $1,114 per acre; Burke, $1,291; Divide, $1,105; McHenry, $2,0295; McKenzie, $1,088; Mountrail, $1,320; Pierce, $1,593; Renville, $1,778; Rolette, $2,071; Sheridan, $1,637; and Williams, $1,491.
Cropland cash rents had a wide range. McLean County posted the highest high at $150 per acre, but with a range down to $22 per acre. Pierce County land rent ranged from $50 per acre to a high of $90. McHenry, PIerce, and Ward counties all posted highs of $90 per acre, for rents, but also lows of $35, $50 and $30, respectively.