Farm values make big jump in North Dakota in 2012FARGO, N.D. (AP) — Farmland values in North Dakota in 2012 jumped 46 percent on average over the year, with demand from both farmers and investors, a new report concludes.
FARGO, N.D. (AP) — Farmland values in North Dakota in 2012 jumped 46 percent on average over the year, with demand from both farmers and investors, a new report concludes.
The report from the North Dakota Chapter of the American Society of Farm Managers and Rural Appraisers, which takes into account the observations of professionals and documented sales, concludes that the increase in values from 2011 ranged from 31 percent in the southwest part of the state to 53 percent in the northwest, according to Agweek.
Land values doubled from 2009 to 2012 in nearly all regions of the state.
Charles Peterson, a vice president with US Bank in Fargo and a society board member, said more investors are looking to buy land because they hope land values and rental rate returns will beat other investments that are not keeping up with inflation.
"They have more money sitting in CDs (certificates-of-deposit) paying less than 1 percent (annual interest)," he said. "If you can pick up some land and get a return of 4 or 5 percent or more, including the appreciation, that's a smart thing to do."
North Dakota State University Extension Service farm management specialist Andy Swenson also said farmers have had six good years of profitability, and are enjoying strong crop prices at the same time as low interest rates.
"Their ability to pay (for land) is there," Swenson said. "There is a lot of cash out there."