Prices for farmland in Marion County have been generally increasing in the past five years, but they have recently been booming, and a big part of the reason has been the overall national financial environment.
Interest rates — both for loans and savings — are very low, and the stock market has been volatile since the housing bubble burst.
“There’s nowhere else to put your money right now,” said Roger Hannaford of Hannaford Abstract & Title Co. in Marion. “You buy land. It’s going to give you a return, and they aren’t making any more of it.”
Kansas State University Research and Extension Agent Rickey Roberts said a section of grassland on a recent auction sold for more than $2,200 an acre.
So who is buying land at those prices? A few years ago, people from Kansas City and Wichita bought up land for hunting, but that has mostly run its course, Hannaford said.
“I don’t think it is speculation on land,” said Kent Becker, Tampa State Bank senior vice president. “Right now local producers are driving the market.”
In particular, land is being bought by local farmers and ranchers who have plentiful resources. With low interest rates and high commodity prices, large operations are looking to expand, said Kevin Fruechting, Tampa State Bank vice president.
“I think it’s been going on since interest rates went down,” Fruechting said.
Fruechting, Hannaford, and Roberts all agreed that the high land prices are becoming a barrier to young farmers trying to get started. Fruechting said, weighing the resources required to get a farm up and running and the return on investment, it takes someone who really wants to farm to get into it now.
“You’ve kind of got to be born into this, almost,” Roberts said.