High Demand - Low Supply

In any business model the best scenario is when you have something that's in very high demand and with a limited supply. Such is the case with farmland in Colorado.

GRAY: The last five years have been good when it comes to farmland and demand continues. Most of the demand is for existing farmland but there are certain operations like poultry and cattle businesses where producers will develop the land. Other land features also help with prices like the availability of water and the proximity to other production facilities.

MARTIN: Soil quality is another big factor as are crop prices. When crop prices are low, like they are now with corn, people tend to look less at land to grow grains on whereas hot commodities will spike interest and prices. Grass lands and ranches are very popular currently and of course the prices reflect that.

GRAY: The biggest factor in the search for farmland is of course water and while Colorado is in the midst of a multi-year drought it may have a detrimental affect on some land prices. Over time that could become a make-it or break-it deal.

MARTIN: A lot of the land being sold is old land where long-time farmers and ranchers are looking to retire or the heirs of the land may be looking for a sale. But right now, farmland is a hot commodity in the state.

And that's Colorado Ag Today. I'm Greg Martin, thanks for listening on the Ag Information Network of the West.