The eastern Plains region of the U.S. is very rich in both farms and
ranches, and brokers and realtors both say the current market for those
entities is nearing or has exceeded historical highs. In addition,
sources said the large majority of these properties that have been sold
are being kept as agricultural operations, either in part or in their
“The land market throughout the western Cornbelt and eastern Plains is
very strong with most areas seeing land values at historical highs or
setting new highs,” said Monty Meusch, head real estate broker with
Farmers National, Omaha, NE. “Demand is being pushed by area farmers and
ranchers wanting to expand their current operations, investors seeking
to place cash in real estate for diversity, safety and income and IRS
1031 tax deferred exchange buyers who have sold land for development and
now must re-invest the sale proceeds or pay capital gains tax.”
According to Meusch, 60-70 percent of agricultural real estate for sale
is currently being bought by active farm and ranch families. “We still
have a good interest from active producers who are insuring their future
by expanding,” he said.
As far as “nonresident” buyers are concerned, Meusch said, “a majority
of them already own land and are very comfortable in growing their
holdings for a number of reasons.”
Most realtors in the region indicated that anywhere between 25-40
percent of buyers have been 1031 purchasers, who need to purchase land
in order to avoid paying capital gains taxes.
Price ranges for ranch land in the region vary widely, even within
In Kansas, Flint Hills grassland has been primarily selling within a
range of $650-1,100 per acre, while pasture land in the western part of
the state sells between $200-450 per acre. According to Meusch, the
upper end of the range is hit when land has more water resources and
As a whole, Nebraska’s land values aren’t as high as the upper end of
Kansas ranch land, but are very comparable to western Kansas prices. In
the Sand Hills of Nebraska, ranch land has been selling between $250-525
per acre. In north-central Nebraska, values have reached historical
highs between $500-750 per acre.
John Childears, broker at Agri Affiliates, North Platte, NE, still
indicated that prices are the highest he has ever seen in his 30 years
of brokering farm and ranch land. “We are looking at ranchers spending
$3,500-4,000 per cow unit right now, and that is just for the land
itself,” he said.
According to Meusch and Childears, demand for grassland in north-central
Nebraska far exceeds availability, and that most available tracts are
only “small acreages.”
Childears added that the 1031 demand for ranches in the Sand Hills is
around 40 percent and that a lot of that money is coming from previous
owner/operators of ranches from other areas of the country.
“We’re seeing a lot of Colorado mountain and Wyoming ranchers who sold
their property over the past few years and are coming out here with that
money and reinvesting it in other ranch properties,” Childears said. “We
are also seeing a similar trend from farmers or ranchers from the Corn
Belt that sold smaller properties for a lot of money and are coming out
here and buying much more land than they had before.”
In terms of outside investors, Childears said there have been some
buyers that have come in and bought ranches and converted them into
recreational properties, but the percentage is still very small.
“What we have seen is that some of these investors start out with the
hunting and fishing aspect of the ranch, and then start to lease out the
ranch to ranchers on the off-season,” Childears said. “It’s the opposite
of ranchers who raise their livestock, primarily, and then lease out
their property for hunting, fishing or other recreational activities as
a secondary business.”
Childears said that situation is generally seen on ranches located on or
near the Platte or Niobrara rivers that run along the Sand Hills.
In the Dakotas, sources reiterated that the market for ranches and
pasture land are very close to historical highs and that demand is
South Dakota has the stronger land values than its neighbor to the
north, but most ranch brokers have said that range and pasture land in
both states is bringing over $200 per acre. The average price for
pasture in South Dakota is around $250, while North Dakota averages
According to ag realtors licensed in either state, most buyers of
pasture, range or a “balanced ranch” are existing livestock operators
who are expanding their operations from neighboring states to the
immediate south or east. Several sources indicated that 1031 money is
also very prevalent in the real estate market in the Dakotas, and that
most of it is going to purchase vast expanses of land in the central
Plains, or mountain areas of the country.
“I would say if it wasn’t for a lot of the 1031 buyers and those that
are into recreational activities, this ranch market wouldn’t be
one-third of what it is now,” said Bryce Nelson, Bryce Nelson Real
Estate, Rapid City, SD.
Nelson added that he sees animal unit values even higher than what they
are in Nebraska and parts of Kansas.
“We have a lot of 30 to 40 acre-per-cow areas in the Dakotas, and the
cheapest we have sold ranch land has been $250 per acre,” he said. “I
have sold a couple of properties this year where the value is well over
$10,000 per animal unit.”
In the eastern half of Colorado, pasture and rangeland values are still
trying to recover after being hit by drought during the late 1990s and
first few years of the 21st Century. However, those values are also said
to be getting close to averaging $200 per acre now, compared to $140-175
per acre in 2002.
“Drought eliminated a lot of pasture, and cows and stocker cattle were
hard to come by the past five or six years,” said Daylynn Lindstadt,
ranch realtor near Rocky Ford, CO. “A lot of that land became available
down here over that time, but demand was very sporadic due to no
livestock being able to graze it. Now we have revived interest from
cow/calf or stocker operators and the (land) market is seeing phenomenal
The eastern Colorado market is expected to improve even more and could
see a peak sometime next year, particularly if cattle herd expansion
continues, he said. — Steven D. Vetter, WLJ Editor
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