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Land Resources / News / Rural land in heavy demand
Rural land in heavy demand (complete article from source)
Source: The Wichita Eagle, by Bill Wilson
August 12, 2008

It's truly a seller's market for rural land in the Wichita area.

But few are choosing to sell with crop prices up.

Farmland is twice as expensive as it was five years ago as demand has skyrocketed -- fueled by investors, city dwellers looking for recreational land and in some instances farmers themselves.

Land that once traded around Wichita at $1,800 to $2,000 an acre now sells for between $3,500 and $4,000, local experts say.

And if the land includes prime hunting or fishing spots, tack another $2,000 an acre onto that.

"It's just crazy," said Larry Steckline, a longtime area farmer who owns the Mid-America Ag Network radio group covering agriculture. "Recreational ground is absolutely unbelievable."

The message from real estate brokers and analysts is simple: There's more money seeking rural farm ground around Wichita than there is land for sale.

"Farm ground is a very strong market, but there's not a lot being sold right now," said Don Burford, an agent with Wichita's Jeff Lange Real Estate.

"The movement on actual sales are there, but they're few and far between."

But investors and executives alike love rural Wichita land, the analysts said.

"The closer to Wichita, the crazier it gets," Steckline said.

"There's a lot of money available, and people spending it to go play," Burford said.

Some of them are coming from the coasts, said Steve Wilbur, an agent with United Country Realty in Wichita.

"There's a lot of money flying around," he said.

"We're more like the bond market in Wichita. Nothing sexy but safe."

Any kind of rural land works, the analysts say, but it helps if there's a duck pond, lake, creek or other kind of water on the land.

"Anywhere. All around," Burford said. "The investors don't care where it's at. What they really like is a little bit of tillable ground for a cash flow and then some pasture, creeks, creek, pond, river for the hunting value."

Farmers themselves aren't actively involved in the buying market. The reason is the combination of high land values, recent downturns in commodities prices and high input costs.

"Even for farmers, there's not much farm ground for sale," Steckline said.

"Prices have firmed to the point that people don't have to sell, and they're holding off. It's getting to the point that you can't make it work."

Plus, Steckline said commodities prices are down around 20 percent and inputs -- fertilizer, fuels, etc -- are way up.

"Scary high," he said. "Two years ago, we were paying $300 a ton for fertilizer. Today, it's $1,000, and that doesn't even take fuel into account. Farmers are nervous."

Terry Kastens, a farm economist at Kansas State University, said crop prices are still "swamping" input costs, making farm land attractive to growers.

"From a risk perspective, though, the risk is much higher (for farm uses)," he said.

"Nobody knows where that's all going. If you're just somebody who wants some crop and non-ag uses, you might be a little bit scared by the risk. The expected outcome, though, will continue to be good profits."

The seller's market should continue unabated, Steckline said.

"There won't be much change," he said.

"I think nobody's going to sell much cheaper than land is priced today, and very few farmers are going to pay that.

"There will remain plenty of money for recreation land with the doctors and lawyers continuing to give top dollar."



Click here for complete article from The Wichita Eagle

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