Farmland values soared amidst a devastating drought. According to a new study put out by the University of Nebraska-Lincoln, the value of the land spurring on Nebraska's number one industry increased around 25 percent last year.
This follows the advances of 22 and 32 percent over the previous two years respectively. The 2013 all-land value of $3,040 per acre is more than double what it was in early 2010.
In the southern parts of Nebraska, the percentage values were more than 30 percent higher than the northern districts.
An acre of irrigated crop land in central and south central Nebraska now averages more than $8,000 an acre.
Vaughn Duncan, vice president and senior loan officer of Farmers and Merchants Bank in Kearney, has been dealing with ag-related purchases for around 25 years and he says the drought in some ways has benefited those land values.
"The drought in some ways has possibly been a benefit to some people because we've got so much irrigation in this area, and so you've got irrigation so you can still raise your crop and still take advantage of the high grain prices and I think that's what's driven some of these land prices too," said Duncan.
He says investing in land for some farmers is sometimes better than putting it in a savings account where they only receive about 1 percent interest on it.
Nebraska is no stranger to the larger ag operations, but Duncan says he's seen that trend slow off a bit because of the high land values.
"I think the high prices actually have discouraged a few of them from expansion right now or buying additional acres, while some have extra money because of the good commodity prices so the feel like they got some money on hand so they feel like that's a good place to put it, especially if they're going to farm as a long term investment -- you know more than one generation," said Duncan.
Duncan also pointed out that cash rentals are increasingly being used by ag producers. According to the report, cash rentals are up by 5 percent.