Premium ContentMouse over Home then click on Premium Content for information.LINCOLN — Having survived the dot-com bust and housing crash in California's Silicon Valley, former farm girl Laurie Glantz-Murphy has watched uneasily as farmland prices in her native Nebraska galloped upward over the past few years.
Glantz-Murphy, 52, inherited 160 acres of irrigated cropland near Harvard, Neb., after her mother died three years ago. She asked her two older brothers, with whom she would share any proceeds, whether the time had come to sell the home place.
"None of us are getting any younger," she said. "We decided 'Let's cash in while we can.' It's like gambling: I'm pretty good at walking away."
And that's what she did last Monday, when the gravity-irrigated parcel fetched $12,000 an acre at auction — perhaps a record for the state of Nebraska.
Her auctioneer, Randy Ruhter of Ruhter Auction and Realty of Hastings, had never sold a parcel for more.
Jason Henderson, Omaha branch executive of the Federal Reserve Bank, said he is unaware of any higher prices for agricultural land in Nebraska.
The buyer was a Hastings-area farmer on behalf of his brother, who lives out of state. The farmer did not return phone calls Friday.
"How about that?" said Glantz-Murphy, who beforehand had been offered an estimated price of $8,700 per acre.
The final price means the family will receive $500,000 more than they anticipated for the property.
Glantz-Murphy, a divorced mother of two, said she plans to use her share of the $1.9 million to pay off her home mortgage and that of her daughter, who lives next to Glantz-Murphy on 3½ acres in a rural area outside San Jose.
"I don't have to worry so much anymore," Glantz-Murphy said. "I can go on with my life."
The lucrative sale is part of a growing trend across the country. With high prices for corn, soybeans and other commodities translating into record income, prices for farmland also have shot through the roof.
In Iowa, average farmland values increased more than 32 percent last year, a record that topped even the boom times of the late 1970s, said Mike Duffy, an Iowa State University agricultural economist who conducts an annual survey of farmland values each November. In Nebraska, average values grew 22 percent, although the latest data available are from Feb. 1, 2011.
Duffy said some land in Sioux County in northwest Iowa sold for $20,000 an acre late last year. Other parcels in the area have sold for prices ranging from $13,000 to $18,000 per acre.
Ruhter, who joked that he's had to learn some new numbers to chant in recent years, said three factors are driving the trend: "Terrifically good crops, very high commodity prices and low interest rates."
Although some buyers are outside investors, 75 percent of the land he's auctioned recently was sold to farmers, Ruhter said.
Cash rents for farmland also have trended upward recently, though at a slower pace than sale prices. Rental prices of $500 per acre are becoming more common, though the Nebraska average still is around $280 per acre for the best irrigated land.
Experts said they don't foresee a situation like that of the 1980s, when land prices crashed and precipitated a farm economic crisis. At current prices and production costs, farmers should be able to make a profit even with higher land prices.
Even if grain prices drop, farmers have significantly less debt than they did in the late 1970s and should be able to weather the blow. In addition, they have better risk management tools available today than they did 40 years ago, with improved crop insurance products and more sophisticated marketing.
Glantz-Murphy said the sale marks the end of an era for her family.
After her father died of lung cancer in 1985, one brother farmed for about 10 years before going into another business. Her other brother moved to Montana.
She earned a chemistry degree at Hastings College before heading to California, where she now is a manager at an environmental testing laboratory.
"We scattered over the years," she said. "When farming wasn't good, a lot of kids had to scatter. You just knew it wasn't an option. You weren't going to be a farmer."
Though she works in Silicon Valley, Glantz-Murphy lives in a rural area. She enrolled her children in 4-H and kept goats so they would know where milk comes from.
Her brother back home in Harvard gave her the OK to sell, saying he drove up and down the field enough.
She laughed a bit ruefully.
"The whole time I've been out here, the farm's always been the ace up my sleeve. If this California thing didn't work out, I could always come home," she said.
"It's sad, because it's the end of our farm. But when you get a price like that, you can't be too sad about it. It takes the edge off."
Contact the writer:
402-473-9581, leslie.reed@owh.com
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