KING CITY, Missouri — It’s become something of a broken record for Missouri farmland sales: low inventories of property butting heads against buyer demand. The shelves are empty.
Recent reports from the industry indicate some caution on the part of buyers, due to a fluctuating market. It’s part of a downturn in agriculture, with net farm incomes and working capital both declining, and with debt and other financial stressors rising to levels not seen for the past few decades. Low commodity prices are also to blame.
The Federal Reserve Bank of Kansas City states farmland values remained relatively stable this spring, with modest declines in most areas.
Research by University Extension showed the average market value of farmland and buildings in Buchanan County in 2017 at $4,053 per acre.
The state’s average that year was $3,385 an acre.
“They remain steady,” said Dan McChristy, a broker with United Country Property Solutions in St. Joseph, of current farmland sales. “Inventory is at an historic low.”
Only a limited number of farms are going on sale, McChristy added, with more interest being displayed from buyers than sellers. Debt restructuring is becoming an option under consideration for some operations.
One suspected factor isn’t actually influencing the rural sales.
“It has no impact on value,” said McChristy of flooding.
The trade war between the U.S. and China still has no bearing on on farmland sales.
“Farm values are driven by farm income,” he said.
McChristy and other brokers say sales remain strong for recreational ground, with interests in hunting and gardening.
“People love the getaway spots,” he said.
Dennis Prussman and Bob Carlson, who also sell agricultural properties in the region for United Country, echoed the analysis of the industry.
“It just doesn’t seem to be changing,” Prussman said of limited inventories and the tug of war between supply and demand. “I’ve been telling the exact same story the last three years.”
Carlson said he’s seeing out-of-state interest in properties in DeKalb and Daviess counties, with row crop operations seen as wise investments. He’s also witnessing the popularity of recreational lands.
Prussman said out-of-state investors are “gobbling up” Missouri tracts. He added there’s some belief more land may be coming into the market this fall.
“If that happens, we could see some price adjustment,” he said.