An agricultural real estate expert says there has not been a drop in most farmland values.
Colton Lacina with Farmers National Company tells Brownfield despite the farm economy, ag land values have been steady. “Depends on locale. Depends on quality. High quality land has definitely held tighter than marginal land. We have seen, in pockets, some slight reductions in what we consider more marginal tillable land, but overall, the market has held together well.”
Lacina says there has been an uptick in local non-farmer investors and institutional farmland buying. He says there are also several cases where farmers own or will buy land that’s not close to the home farm to use in future land swaps without huge tax penalties. “We actually see those quite a bit where a producer will have an opportunity to purchase a piece that’s much closer to home and then turn around and liquidate something that’s 15, 20, or 30 miles away and turn around and do a 1031 exchange into that property that’s closer to home.”
Lacina says the IRS 1031 form allows people to swap properties without tax penalties. “You can sell a farm that you bought ten years ago. You can take the proceeds from that farm, turn around, reinvest all of those funds back into another like kind asset, another farm, and not have to pay the capital gains tax that you gained from owning that farm over the years.”
Lacina says now is the traditional busy season for selling agricultural land because it’s when most annual leases are up for renewal. He says there are also investors willing to work with producers who want to add farmland to their operation.
