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Should I sell or lease my Nebraska farmland?

Sell Nebraska FarmlandAt some point or another, many landowners will face the decision on whether it’s in their best interest to sell or lease some or all of their Nebraska farmland. The decision to sell farmland is often guided by emotional and/or financial concerns, and understandably so. Many landowners may attempt, in the end, to lease their land instead. A number of issues play a factor in this decision, but considering all available options is necessary before reaching a decision on whether to sell or lease your land.

What are some advantages of selling farmland, versus leasing it? A landowner may make the decision to sell farmland if they, or their children, are not interested in farming it themselves, and may have little emotional ties to the land. Many times, they are not living on the land themselves, or they have received it as part of an inheritance, and don’t have a background in agriculture. In these situations, selling the land may be a better option, so long as all tax considerations are taken into account. Consulting with an experienced lawyer and accountant is important, so that one is able to contend with the capital gains taxes that are incurred as a result of selling valuable land.

On the other hand, leasing farmland is a more attractive option for those who would like to retain ties with the land, but cut back a bit on farming themselves. Many times, leasing farmland is a way to incur income for retirement, and as a way to hold onto land that they wish to pass on to their heirs. After all, once the land is sold, the chances of ever getting it back are slim.

Leasing farmland is a straightforward, simple arrangement that is attractive to many landowners in the second situation. Depending upon the landowner’s desired level of involvement, a straight cash-rental agreement or a flexible lease agreement may be worked out to the mutual benefit of each party.

Whatever decision is made, it is critical to have an estate plan in place, especially if you plan on leaving any land to your children. Proper estate planning can mean the difference between a peaceful, smooth transition of assets and a nightmare of taxes, late night decision making, and family feuding.

2015 has seen substantially lower commodity prices and the resultant leveling out and even lowering of land values in comparison to the last decade of burgeoning land prices. This correction may slow down landowners in selling off their ground to a certain extent. Similarly, cash rental rates are also leveling off and declining. In this way, it is important to consider the other reasons for retaining or letting go of ground, rather than solely financial reasons.

Are you trying to determine the best course for your farming operation? Feel free to contact UFARM—our experienced land managers are glad to listen to your concerns, and help you work through your options with your farming operation’s best interests in mind.

UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

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Nebraska Farmland: A Good Long-Term Investment

corn at sunrise

Over the last decade, farmers and landowners across the Midwest have witnessed land prices make a steady climb, only leveling off in the last couple of years. While talk of a land market bubble persists, farmland investment analysts are not so quick to hop onto the bubble bandwagon. In fact, many continue to laud investment in agricultural land as a solid investment option, even despite lower commodity prices and acres that continue to level out.

According to Forbes contributor Joshua Rogers, a landowner who bought land in 2000 and sold it in 2013 would have earned a 12.6 percent annualized return on his investment, not including the proceeds from farming the land or leasing it out to a farmer. One needn’t be an investment guru to understand the significant ROI on such an investment, and many actual investment analysts see a number of other reasons to hang on to farmland.

One reason is the continued increase in the global population and the resources needed to feed that population. According to global statistics analysts, the world population increases by 200,000 persons each day, while the total of 4,973 million hectares of agricultural land amounts to an average of 0.74 hectares per person.

Put simply, amount of arable land worldwide is far outpaced by the growing population. Since the amount of arable land worldwide is finite, farmers across the globe continue to find ways to meet the demand that a growing population requires. It’s no wonder that many outside investors are seeking to obtain hard assets that are critical to civilization, and while the supply and demand forces that act on land values and crop prices are complex, it’s hard to argue with their reasoning.

Another reason to invest in farmland is due to the soaring demand for biofuels. CNBC.com contributor Richard Murphy notes that ethanol production accounts for 23 percent of total corn utilization, according to the Renewable Fuels Association, a significant portion of the total amount.

These things, along with global crop yields that are leveling off after the great advances over the last several decades in that area, all join to make investment in farmland a solid decision.

While those looking to investing in agricultural land may have missed out somewhat on the great returns of the last decade, the emotional value of those who were born into farmland shouldn’t be dismissed, and certainly is less easy to quantify in financial terms. The value of holding onto farmland that has been in the family for decades is significant, and especially in terms of retirement plans. However, if the notion of selling farmland isn’t an emotional issue, there are many options for those who would like to sell their land without incurring capital gains taxes, such as exploring a 1031 Exchange.

Are you concerned about the potential ROI of your land asset, or looking to invest in Nebraska farmland? Please talk to one of UFARM’s land professionals—we are happy to discuss all the options available to you. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

Sources consulted: “Farmland Investment Report.” Farmlandinvestmentreport.com. Web. 16 Jun. 2015.  Murphy, Richard McGill. “The Best Long-Term Real Estate Investment: Farmland.” CNBC.com. CNBC. 24 Mar. 2014. Web. 16 Jun. 2015.  Rogers, Joshua. “Dirt Cheap? Investors are Ploughing Into Farmland, Here’s Why.” Forbes. 23 Sep. 2014. Web. 16 Jun. 2015.

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Can a Land Manager Help Me Sell My Land?

Benefits of Having Land Manager Sell Your LandThe time has finally arrived; although no farmer ever officially “retires,” you have decided that, for financial and tax considerations, or perhaps for the benefit of the next generation, the farm will need to be sold. Perhaps you are not actively farming your land, and have decided to let it go. Or, perhaps you’re desirous of selling land and buying land in addition.

While the sale of land may initially seem like a fairly straightforward endeavor, many come to discover that in certain respects, they’re out of their depth. For instance, how does one know if they’re in the best position to sell their land at the top price? What about making improvements on the land to increase its selling price? What about tax issues that may arise as the result of a large sale? Perhaps the intent to derive retirement cash flow with the sale of farmland; if so, what is the best way to go about ensuring that one’s retirement income is safe for the duration?

These, and many other considerations, are why more and more people are hiring professional land managers in order to help them sell their land. They recognize the importance of hiring a qualified real estate professional who understands the agricultural landscape and market. Especially over the last several years, with burgeoning land values and volatile grain markets, it’s becoming more crucial for those in a selling position to have the advice of someone who is involved with these sorts of transactions on a daily basis.

Often times, when selling the farm is more of a family affair where the needs and interests of multiple parties must be considered, a professional land manager can be a great asset by serving as a fair and impartial liaison between parties. Even among families with good relationships, the stress brought on by selling the farm—which can be considerable, especially adequate estate planning hasn’t taken place—can cause tensions to flare. A land manager’s presence and expert input can be a critical component in ensuring a successful and mutually beneficial transaction for everyone involved.

Professional land managers are also a great asset when it comes to making sure your property is publicly advertised and exposed to the correct markets with the most buying potential. Farm managers have spent years building up networks and relationships, and often have insider’s information that laypeople do not. This simple fact can mean a considerable amount when it comes to selling those acres.

Are you in a position where you need to sell land? Are you concerned about making sure you get the most out of your asset? Please don’t hesitate to contact a UFARM land professional. We are happy to discuss your concerns with you, and help you form a plan of action for achieving your goals for your farmland.

UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

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Why Is Farmland a Good Long Term Investment?

Farmland investment

It’s no secret that farmland values have boomed over the last decade. Many farmers and outside investors have bought and continue to buy up land to pad their investment portfolios. Despite the decreasing commodity values of the last year, many economists continue to be optimistic about buying land as a long-term investment.

Commodities investor Jim Rogers, who founded the Rogers International Commodities Index, is part of an increasing number of farmland investors hoping to benefit from the growing world population’s need for food. With a world population that is expected to grow from 7 billion to 9 billion by the year 2050, and the projected arable land to decrease steadily in the same time span, the case for farmland investment worldwide is a good one.

Says Rogers, “More people need to get into farming; otherwise, we won’t have any food. I’m still wildly optimistic about the future of agriculture worldwide.”

There are many other factors contributing to the desirability of quality farmland. One is that the increase in population will occur largely in the developing world, where rising incomes will contribute to higher meat consumption. Increasing livestock consumption creates a demand for grain and water, so farmers worldwide will rise to the demand by putting out more crops and farming more acres. Another driver of the farmland market boom is the demand for biofuels, such as ethanol.

These factors, combined with a worldwide leveling off of yields after the many advances of the last 40 years, put owners of quality farmland into excellent position to benefit financially in the long-term.

While outside investors continue to be bullish about quality farmland, others emphasize the need use caution before jumping headfirst into the farmland market. While land values have risen dramatically over the last decade, they are set to level off as commodity prices do the same.

Purdue University Extension agriculture economist Craig Dobbins says, “The next couple of years for farmland values are going to be a little less certain than the last few years have been. Commodity prices have come down significantly in the last year, so these large returns we’ve kind of become accustomed to for the last few years have now shrunk.The probability of short-term farmland values staying flat or seeing a small decrease is much bigger than the probability that we’re going to see another double-digit increase.”

While farmland continues to be a solid way to invest your capital for the long-run, it’s important to evaluate your financial situation carefully before buying land in 2015.

Are you considering buying land, or do you have concerns about the value of your farmland going forward? Contact UFARM—we’re happy to talk with you about your land asset. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

 

Sources consulted: Murphy, Richard McGill. “The best long-term real estate investment: Farmland.” CNBC.com. CNBC. 24 Mar. 2014. Web. 16 Dec. 2014. Stewart, Jennifer. “Farmland value shift signals need for cautious purchasing.” Purdue University News. Purdue University. 13 Feb. 2014. Web. 16 Dec. 2014.

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Effects Of Lower Grain Prices On Nebraska Land Values

Land ValuesAs farmers across the state are becoming reacquainted with their combines, and are bringing in high yields, they are also dealing with lower grain prices. With grain prices heading south, it’s no surprise that Nebraska land values are being similarly affected. Nebraska farmland values remain strong, but a slow down is beginning to show. Non-irrigated farmland in the Nebraska rose 3.7 percent from a year earlier, while irrigated farmland rose 2.3 percent.

Farmers are beginning to feel the pinch of smaller profit margins and this will eventually be reflected in land prices. According to an index from ag bankers, second quarter farm income fell to a reading of 80, down from 100 from 2010 to the middle of last year. According to the survey, “Farm income remained well below year-ago levels due to falling crop prices and poor winter wheat yields. With summer rains easing drought conditions, the potential for record crop production this fall could keep prices low and shrink profit margins further.”

Grain prices continue to be a worry and farmers and market analysts are anxiously anticipating Friday’s next WASDE report from the USDA to further gauge grain futures. While the outlook doesn’t look great, all is not total doom and gloom. Besides farmers who sold some of their 2014 crop above today’s market prices, federally subsidized crop insurance and new programs in the latest Farm Bill will provide safety nets and perhaps allay the fears of many producers.

Despite these safety nets, however, farmers and landowners undoubtedly face challenges. Experts expect the agricultural sector to enter a downward cycle, though it’s unclear if this will be a multi-year issue or not. Interest rates may see an increase as well in the near future, also undoubtedly at the forefront of many farmers’ minds.
In addition to these challenges, farmers face tough decisions about when to sell their grain. However, according to Ainsworth West Plains Bank president Michael Kreycik, farmers should be able to absorb a few years of low prices and even losses. He says, “I think our loan customers are in a better position now than they were in 1980 to absorb a higher rate of interest and softening of land prices.” A key factor for many farmers and landowners will be if interest rates begin to rise—if so, that could pose a problem for many.

At any rate, this could be a test for the 2014 Farm Bill’s safety nets, as some economists are predicting substantial payments under the new law to grain farmers this year.

Do you have concerns about changing land values? Are you looking for ways to protect your land investment? Contact a UFARM land manager—they’ll help you make the right decisions.
United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact Us.

Sources consulted: Hubbard, Russell. “Fed Survey: Lower Grain Prices Limit NE Farmland Values.” Omaha.com Money. 15 Aug. 2014. Web. 06 Oct. 2014.; Jordon, Steve. “With No Sign of Increased Demand, Farmers Battle Falling Corn Prices.” Omaha.com Money. 03 Aug. 2014. Web. 06 Oct. 2014.

 

 

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Innovative SEO Strategy Drives Record Real Estate Buyer Traffic

Lifestyle Real Estate Website Breaks Web Traffic Records
UFARM Real EstateSeptember 2014 – (KANSAS CITY, Mo.) – More than 90 percent of real estate buyers start their search for property online1. In July, millions of these consumers searched the Internet looking for lifestyle real estate, which includes second and vacation homes, retirement communities, ranches, farms, horse, mountain, waterfront and other properties outside of urban cities. According to United Country Real Estate, the nation’s largest seller of lifestyle real estate, visitor traffic at the firm’s national website increased to record levels. Consumers are finding the United Country national and local websites due to some innovative search engine optimization (SEO) strategies.

“We have been consistently breaking web traffic records at www.UnitedCountry.com and our other national lifestyle property websites each month for well over two years now,” said David Dickey, chief technology officer for United Country Real Estate. “We’ve surpassed 1.5 million visitors in July to just one of our numerous owned lifestyle and rural property websites, more than 760,000 of which were unique visitors with 51,794 user sessions. These numbers are larger than any month our team has seen since www.UnitedCountry.com launched nearly 20 years ago.”

These numbers reflect the investment the company has made toward its in-house SEO team, which is continually looking for new ways to bring lifestyle and rural properties to the attention of the internet-savvy buyer of today’s world.

“Number of visits to a website and the number of unique visitors to a website are the numbers where you see the real action,” Dickey said. “Each month we are seeing approximately 3 million visitors to our entire network of lifestyle websites.”

United Country continues to innovate with new web technology and SEO techniques to help buyers easily find the company’s more than 3,500 lifestyle property websites and sort through over 65,000 properties with ease. Some of these technologies and techniques will serve single listings up to property searchers or office sites in a specific market, and uniquely also layer on national, regional and state property type websites. In most cases, United Country will deliver more than one search result on page one results for thousands of buyer searches. This powerful SEO effort has resulted in the record web traffic the company has been experiencing for more than seven years and achieving a new monthly record in July.

“The ability for a small city or town real estate professional to ensure their websites and listings are found by buyers searching internationally or regionally for lifestyle property types is oftentimes unachievable or an investment they can’t afford to make without the power of a national network,” said Mike Duffy, president of United Country Real Estate. “This is why we’ve made the strategic decision to make a major investment in United Country websites and buyer search strategies and drive optimal buyer search performance. We have made a commitment to our affiliates that we will continue to innovate real estate marketing to expose their local listings more broadly as United Country has done since 1925.”

For more information about United Country Real Estate, call 800-999-1020 or visit their main website at www.UnitedCountry.com.

1 NAR 2014 Consumer Online Search Study

About United Country Real Estate

United Country Real Estate – a division of the United Real Estate Group – is the leading, fully integrated network of conventional and auction real estate professionals. The company has been an innovator in lifestyle and country real estate marketing since 1925. United Country is the only franchise company to specialize in small city, town, second home, vacation, retirement, coastal, mountain, recreational, waterfront, ranches, farms, timberland, land, equine, livestock, investment and other lifestyle properties outside of metropolitan markets. United Country supports nearly 600 offices and 5,000 real estate professionals across the US, Costa Rica, Panama and Honduras with a unique, comprehensive marketing program that includes the highest ranked and largest portfolios of specialty property marketing websites, the largest real estate marketing services company, an extensive buyer database of more than 500,000 opt-in buyers and exclusive global advertising of properties.
NATIONAL HEADQUARTERS
2820 NW Barry Road, Kansas City, MO 64154
816-420-6200 www.unitedcountry.com