Sales prices for high quality farmland in Tennessee are rising, but sales activity has slowed, Farmers National Co. reported today.
“Land is still a good investment for buyers, but they want the high quality properties that hold value,” Lee Vermeer, vice president of real estate operations at Farmers National, said in a statement.
Farmers National is an agricultural real estate and farm and ranch management company.
In the Tennessee, Arkansas, Mississippi region owners are holding on to their land and farmers are taking advantage of federal programs to raise the value of their property, Farmers National said.
High quality farmland in Tennessee is selling for $3,500 an acre.
Here’s what the Farmers National press release said on the three-state region.
Demand for Class A farmland continues to increase in the Mid-South, and that’s driving prices up said Keith Morris ABR, ALC, CRB, GRI, area sales manager for Farmers National Company in Arkansas, Mississippi and Tennessee. However, sales activity has slowed, because owners are holding onto their properties.
Farmers are improving their current properties to help increase value. Some farmers are using federal programs to increase their property value and yield, such as projects to maximize water usage.
Morris added that sales of development tracts and recreational properties have come to a halt, unless property is distressed or priced for cash investors to hold.
“Due to timber prices, mills have shut down and buyers have receded from buying timber land at this time,” said Morris. “Since the majority of the south is timber ground, those buyers will return to timber properties once the demand and market return for lumber and veneer. A lot of timber land has dropped from the high $2,000 per acre values, to well below that mark. It’s the first such decline we’ve seen in years.”
Check out charts showing cropland values nationwide here.