Part 2: US Farmland Real Estate Trends

This is Lorrie Boyer for the Ag Information Network. In part two of this series with Farmers National Company, we take a closer look at who is buying agricultural land and what it is being used for. Paul Schadegg is the Senior Vice President of Real Estate Operations-

“We track that very close and have for years, and that has not changed. There's still somewhere between 70 and 75% of the buyers of land, agriculture land are farmer operators, the rest are investor types, you know, sometimes they're individual investors, sometimes their group sometimes trusts or funds. But the important thing to remember though, is when I say that the successful buyer is that farmer operator, but they are being pushed, the investor decides he's willing to pay X amount for a piece of land, he's going to push to that he's forcing that farmer operator to pay that premium in order to get bought.”

Schadegg says that although investors are purchasing the land, the land that is selling is staying in production agriculture. Their intent is to operate it as farm and sees a return on investment. That's why they have a hard stop at a certain value where it doesn't make any sense. If they can't get a return on those areas a farmer might be trying to expand his operation. It might be a piece of land that's adjacent to him that he's never seen come up for sale. That's where that premium is paid."