A new study shows a drop in South Dakota farm land prices. Officials say this is the first time farm land values have fallen since the study began 26 years ago.
The South Dakota State University extension released the annual Real Estate Market Survey this week. The survey gathers data about state land values from county assessors, agricultural lenders and rural appraisers. In previous years . . . farm land value showed a marked annual increase . . . anywhere from ten to 30 percent per year. But … this year South Dakota farm land values showed an average loss more than two percent.
Jack Davis is a Crop Management Field Specialist for the SDSU Extension. He says land owners are in a tough spot right now . . . and land values may not be able to rebound easily.
“Now as commodity prices have come down in recent years, we’re seeing some of that slowing down and some down trend in the land values. I would say that the biggest factor really is interest rates. The lower commodity prices will keep them from rising very fast; it will also still put a little down pressure. But the biggest factor again I feel is interest rates on the land value itself,” says Davis
Davis says despite average drop in land values some pockets, saw growth. He points to the northwestern part of the state, with a 13 percent increase. However, Davis says this is offset by other areas like southwestern South Dakota which saw a 14 percent decrease in land value.