South Dakota Farmland Market Trends - Current and Future Research

Agriculture land market trends are of considerable interest to many people - farm managers landowners, realtors, prospective buyers and sellers of farm real estate, loan officers, agribusiness managers, public officials and the general public. Interest and concern about farmland market trends intensifies during periods of rapid increases or decreases in land prices. Both of these events have occurred since 1971. For South Dakota, average per acre farmland values increased 345% from 1971 to 1982 ($85 to $291) . Since late 1981 and early 1982, farmland prices have steadily declined in most regions of South Dakota - reflecting sharply reduced profits in agriculture and poor prospects for a quick turnaround. Changing land prices affect the wealth position (farm real estate is over two-thirds of the value of farm business assets) and borrowing capacity of farmland owners. It also affects farm credit policies, farm rental arrangements and public policies concerning property taxes, soil conservation and land use. Recent farmland price movements lead to several issues concerning land market structure and behavior. For example, what the major characteristics of farmland owners, buyers and sellers and how have these changed over time? What are the relationships between farmland values and rents? How do land prices and other market characteristics differ in various regions of South Dakota? What are the major changes in farmland financing methods and why have they occurred?