Ag land values still climbing

Talk about it

WORTHINGTON — As long as farmers continue to pay high prices for land, property values are going to continue to climb — and they did again this year.

Nobles County Assessor Byron Swart said owners of agricultural land will see another 10 percent increase in their valuations after recorded land sales from Oct. 1, 2008 through Sept. 30, 2009, showed demand for farm ground has not waned.

During the one-year period, 47 sales were recorded in Nobles County — only three of which included farm buildings. Swart said the average price paid per acre was $3,927.68, with the per-acre price ranging from a low of $504.88 per acre on a parcel in Little Rock Township, to a high of $5,700 per acre on a parcel in Graham Lakes Township.

The strength in the market for agricultural land is good news for people interested in selling, but not so much for those who choose to remain where they are and pay the rising tax bill.

“The farmer knows what the land is bringing, so he doesn’t have a whole lot of argument,” said Swart. “I’ve got to put the value on as if it were sold. The only thing I can look at are the sales.

“(People) aren’t happy with the taxes, but the market value they can’t argue with,” he added.

Though it’s difficult to say just how much of an impact the rising values will have on taxes, Swart said ag land will pick up more of the county’s tax burden.

“It depends on what the levy does, too,” he said. “Levies are going to have a heck of an influence on what taxes are going to be.”

While a 10 percent increase in valuation sounds like a lot, it pales in comparison to the 30 percent increase Swart placed on ag land values two years ago.

“That would have been (based on) sales in 2006 and 2007,” he said. “Now, we’ve kind of leveled off in a sense that it’s only a 10 percent increase this year.”

Based on the ag land sales that have been recorded since Oct. 1, 2009, Swart said it appears he may have to increase ag land values by 15 percent next year.

“Right now, I’ve got 15 sales in, and I’m averaging $4,800 per acre,” said Swart.

“We had two big sales — one in Indian Lake Township went for $6,300 per acre, and one in Little Rock Township went for $6,400 (per acre),” he added. “There are some sales coming up the middle of this month, and those should be interesting to hear, too. Once I get them all in, then I can see where we’re at.”

Sales recorded through Sept. 30 will be used to calculate the increase in property valuation in 2011.

Nobles County isn’t the only county in far southwest Minnesota to see ag land values on the rise.

Pipestone County Assessor Joyce Schmidt said ag land values are going up 5 percent to 15 percent this year, based on 20 sales in that county during the reporting period. The average price paid per acre was $3,073, which took into account both tillable and pasture lands. The lowest sale was $1,300 per acre, while the highest was $5,500.

Jackson County Assessor Farley Grunig said ag land values will go up 4 percent this year, based on 33 sales in that county and an average per-acre price paid of $4,764. The 4 percent increase is down considerably from the 30 percent increase in valuation he made in 2009.

As for next year, Grunig anticipates bumping up ag land values another 4 percent. So far, he’s recorded 10 sales in Jackson County this reporting period, with an average per-acre price paid of $4,519.

Cottonwood County Assessor Gale Bondhus said she won’t increase ag land values at all this year, as the prices paid for the 31 sales during the reporting period were close enough to the recorded market values. That won’t be the case in 2011, she said.

“For 2011, we’ll be going up 10 to 15 percent,” Bondhus said.

So far, Cottonwood County has recorded 20 agricultural land sales in this reporting period. The deeded average is $3,544 per acre, while the tillable average is $4,284 per acre.

In Rock County, Land Records Director Tom Houselog said ag land values increased by 6 percent this year, based on 27 sales between Oct. 1, 2008 and Sept. 30, 2009. The highest sale was $8,000 per acre, while the low was $3,765. The 6 percent increase in valuation was down from the past two years, he said, adding that values went up 15 percent to 20 percent in 2009, and 30 percent to 35 percent in 2008.

As for next year, Houselog said the 15 sales that have taken place so far this cycle have averaged about $5,000 per acre. Based on his calculations, the median ratio is just under 94 percent — within the state guidelines that valuations range from 90 percent to 105 percent.

“I wouldn’t anticipate having to go up next year,” he added.

Murray County Assessor Marcy Barritt recorded 33 agricultural land sales between Oct. 1, 2008, and Sept. 30, 2009, at an average price of $3,700 per deeded acre. The high was $6,100, while the low was $2,100 per deeded acre, she added.

While the value of ag land continues to rise in Nobles County, residential, commercial/industrial and apartment building valuations will remain unchanged.

There were 130 residential property sales recorded in the county during the one-year period, down from 180 to 200 annual sales in recent years. Though fewer homes were sold, the sale prices were “pretty close” to the market values placed on them, Swart said.

Ten commercial/industrial buildings changed hands between Oct. 1, 2008 and Sept. 30, 2009, but those sales were also fairly close to the market value. Just one apartment building was sold during the one-year period.

Tags: property values, agriculture, farm, farming, news