A leading expert in land, auction and agribusiness related transactions says 2015 is going to be a different kind of market for farmland. Murray Wise Associates, LLC says while falling commodity prices will play a role, there’s more at work there.
“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 [farmland authority Murray Wise, president of Murray Wise Associates].
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.
An exception to the cloudy and mixed outlook is Florida, where Murray Wise Associates has sold almost 12,000 acres during the past 24 months. That surge has been fueled by strength in the groves, row crops, pasture and woodland markets.