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Minnesota Farm Prices Down Nearly 5%

Updated: 08/26/2014 6:54 PM
Created: 08/26/2014 10:33 AM KAALtv.com
By: Brianna Long

(ABC 6 News) -- About a year ago, farmland prices were at near-record highs. Land was going up for sale, as some farmers were looking to take advantage of that opportunity.

It's all linked to commodity prices, and this year those prices are down significantly.

Ray Nelson is a Rochester Farmer, and right now his main concern is getting a good harvest.

"Our farmers got hurt from that wet spring," said Nelson.     

He owns about 400 acres just south of town. Right now, he's not looking to buy or sell farmland. But if he was, he might also be paying close attention to land prices.

"We've seen about a five to ten percent reduction in farm prices over the last year, year and a half. It's primarily based on commodities prices. They've been pushed down about 50 percent," said Jacob Hart, with High Point Reality and Auction. 

Land in Southeast Minnesota is averaging right around $6,500 per tillable acre. It was more last year, but experts say that doesn't necessarily mean this year's prices are low.

"Iowa and Minnesota both saw record land prices over the course of the last year to two years because of commodity prices," said Hart.

It's not having too big of an impact on people looking to buy or sell their land.

"We're still in a good market, folks are still selling. We have auctions and listings coming on every day on every day people are interested in selling its not as good as it was 2-3 years ago. But its definitely better than it was 20 to 30 years ago. Again, it's a long-term market," said Hart.

"That land value's nothing but paper money. In fact, it makes it hard to expand if it gets too high," said Nelson.

So for now, Ray says he'll keep his focus on his crops.

"We need timely rains every week if possible. It's hard to have them. That's going to really make a fairly decent crop around here," said Nelson.  

Photo: ABC 6 News