OMAHA, Neb. – What started out with better than expected sales prices at land auctions prior to fall harvest extended into very strong prices at some auctions during October and November, surprising many.

“Farmers National Company had auction sales in several states during this time where land sold near levels last seen in 2012. In specific instances, prices for good quality cropland in the heart of the Midwest are up hundreds to thousands of dollars per acre more than anticipated,” said Randy Dickhut, senior vice president of real estate operations at Farmers National Company.

In several states, including Illinois, Indiana, Iowa, Kentucky, Michigan and Ohio, interest in farmland by investors has grown in the past year, according to Farmers National.

“Prices for top quality cropland sold at our auctions are up $1,000 per acre or more since before harvest,” said David Whitaker, area sales manager for the company. “Demand for good farmland has definitely increased.”

Despite the challenges faced by agriculture and producers in 2020, the farmland market remained stable throughout the year and strengthened in the last quarter. Iowa agriculture especially endured economic challenges with interruptions to livestock deliveries, the derecho storm, lower ethanol demand and a late season drought across much of the state.

“Government payments, crop insurance, low interest rates and rising grain prices sustained farmers’ interest in buying land especially in the fall time frame,” Whitaker said. “Add in the growing number of investors who want to own farmland and you have a strong demand driven land market.”

Agricultural land prices have been fairly stable in the past several years despite the gyrations of the ag economy. Producer incomes were taking hits, but the land market took it in stride except for the hardest hit areas or segments. The factors supporting the land market remained constant during this time: historically low interest rates, a lower supply of land for sale and adequate demand for good cropland about everywhere.