Farmland Ownership Trends in North Dakota: A Closer Look
Despite headlines about high-profile investors like Bill Gates acquiring North Dakota farmland, the majority of land purchases are made by local farmers, according to Bryon Parman, an agricultural finance specialist at North Dakota State University Extension. He estimates that roughly 70% of farmland purchases are by farmers, with this trend shifting toward a 50-50 split during low-crop-price cycles.
While wealthy outsiders can influence local markets, Parman notes that most investors are local residents, often retired farmers or their heirs. He advises against viewing North Dakota farmland purely as an investment; it typically yields low returns compared to other financial options.
Recent data show a consistent increase in farmland values over the past few years, with cropland prices continuing to rise even as market signs indicate a possible softening. Lindsey Brown from People’s Company highlights a steady demand for land, particularly among farmer-buyers and investors, citing potential returns as farmland often outperforms the S&P over the long term.
However, Parman stresses that ownership is crucial for farmers seeking creditworthiness and expansion opportunities, particularly as rising costs challenge new entrants in the agriculture sector. The conversation continues on how to balance investment and ownership in this evolving landscape.
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