Editor's Note: Each year DTN publishes our choices for the Top 10 ag news stories of the year as selected by DTN analysts, editors and reporters. This year, we're counting them down from Dec. 18 to Dec. 31. On Jan. 1, we will look at some of the runners-up for this year. Today, we continue the countdown with No. 4: Farmland values that continue to climb despite headwinds from low corn and soybean prices and a tougher interest rate environment.

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MT. JULIET, Tenn. (DTN) -- The U.S. farmland market's resilience was on full display in 2024. Farmland values climbed 5% on average, according to USDA, and even though no-sales made a return to the auction block, sales of large and iconic properties drew plenty of attention.

Bruce Sherrick, director of the TIAA Center for Farmland Research at the University of Illinois, said farmland values have mostly grown in a slow, steady manner since the 1930s. There have been a few periods of price spikes but only 10 or so years when prices declined, including the 1980s farm crisis.

"Farmland as an investment has outperformed equities over the long run and provides better inflation protection," Sherrick said. Unlike equities, the supply of land is fixed, and how much comes on the market at any time is determined primarily by nonmarket factors, such as estate transitions.

Farmers took a notable step back from the buy side 2024, generally opting to preserve working capital unless it was the perfect piece of property. Overall, U.S. net farm income declined 4% from 2023, with strength in the livestock sector offsetting crippling pain on the grain side. Cash receipts for corn and soybeans are expected to fall 21% and 12% respectively from last year, accounting for nearly all of the decline in crop receipts.

Investors, sensing bargains, stepped up.

"Investors provide price insulation in downturns," said Howard Halderman, the third-generation president of Halderman Real Estate and Farm Management, based in Wabash, Indiana. Investors typically target properties with income potential of 3% to 4% or more, Halderman said. At present, cash rents compared to many Corn Belt land values put the cap rate around 2.5%.

No-sales started popping up at auctions last spring, which occur when bidding doesn't reach a buyer's reserve price, and they became more common in the fall. The fall auction season was busy, and more inventory on the market contributed to some weaker sales prices in some regions.

Dough Hensley, president of real estate services at Hertz Farm Management, told DTN last spring that he expected the farmland market to continue to become more localized, with pockets of over- and under-supply driving prices.

In one week, last spring, several auctions resulted in no-sales while another came only $400 shy of an Iowa record.

"When something comes up in one of those really tightly held areas, even if all the economic factors are saying it should be weaker, you may have a strong sale for a nice 80 (acres) or quarter section because it's hard to buy in certain neighborhoods."

Another trend of 2024 was big acreage deals:

-- The largest contiguous ranch in Kansas changed hands in January. The 44,923-acre P5 Ranch sold to Don Horton, founder of the nation's largest homebuilder, the publicly traded D.R. Horton, Inc., for an undisclosed amount. (https://www.dtnpf.com/…)

-- The Mormon church's real estate investment company, Farmland Reserve Inc, purchased 44 farms in 8 states totaling 41,554 acres from Farmland Partners, Inc., a publicly traded real estate investment trust. The farms are located across Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma and the Carolinas. The Church of Jesus Christ of Latter-day Saints paid $289 million in cash, an average $6,955 per acre, in October. (https://www.dtnpf.com/…)

-- During the summer, 26,206 contiguous acres west of the Missouri River in South Dakota sold for $31 million, or $1,183 per acre or $1350 per tillable acre. In addition to a full set of buildings, the property included a private grain elevator with rail-loading access and 1.5 million bushels of storage. (https://www.dtnpf.com/…)

For more on this year's farmland market, please read:

-- "Cropland Values Average $5,570 Per Acre, USDA Land Summary Report Says," https://www.dtnpf.com/…

-- "Land Investments Hold Long-Term Value," https://www.dtnpf.com/…

-- "'No Sales' Return to Farmland Auction Market, But Local Conditions Can Still Drive Strong Sales," https://www.dtnpf.com/…

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More countdown stories:

-- See No. 10 story, "2024 Was Year of Labor Unrest at US and Canada Rail and Shipping Ports," https://www.dtnpf.com/…

-- See No. 9 story, "'Over-the-Top' Dicamba Product Registrations Vacated," https://www.dtnpf.com/…

-- See No. 8 story, "Record-High Prices Rippled Through the Cattle Market in 2024," https://www.dtnpf.com/…

-- See No. 7 story, "EPA Advanced Plans in 2024 to Meet Endangered Species Obligations for Pesticides," https://www.dtnpf.com/….

-- See No. 6 story, "Active Weather Pattern's Massive Impact: Megafires to Flooded Fields, Flash Drought to Hurricane Fatalities," https://www.dtnpf.com/…

-- See No. 5 story,"H5N1 Detected in Dairy Cattle for the First Time," https://www.dtnpf.com/…

Katie Dehlinger can be reached at Katie.Dehlinger@dtn.com

Follow her on social platform X @KatieD_DTN

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