With commodity prices falling, farmland value has fallen with them in much of Kansas. But the unusual market for real estate in Douglas County has largely shielded it from the trend.
In January average sales prices for an acre of high-quality farmland in Kansas dropped 10 percent from what they were in January 2013, according to a survey from Farmers National Company, a farm management firm with real estate and insurance services.
In Kansas, land went for $4,500 per-acre on average in January, compared to $5,000 last year, according to the survey. Several other heavily agricultural states saw price drops as well, including Nebraska, where prices per acre fell by $1,000.
That's a shift from the past decade. From 2004 to 2013 farm real estate values nearly doubled, according to the USDA's National Agricultural Statistics Service. The rise in land prices followed record market prices for corn and soybeans, driven by international demand and biofuels production. But those prices started to fall in 2013, and land values in many places have fallen with them.
Bill Wood, director of the Douglas County extension office, said that recent droughts in western Kansas have also affected prices in the region. "They've taken a worse hit," he said.
The same pattern hasn't held in Douglas County, where the weather and demographics make for a different market. With more rainfall in this part of the state, farmers have seen good wheat, corn and soybean crops, which have helped keep land prices strong.
"Overall most of our farmers were pretty happy," Wood said. "I haven't heard from anyone who's felt land was dropping."
Perhaps even more important than the weather, competition from industry and residential landowners keeps real estate demand in the county generally high compared to its rural counterparts elsewhere in Kansas. "Where we're at here, we've got enough other types of investors that keep land pretty competitive," Wood said.
"Douglas County is a wonderful county to live in. Lots of people want to live here," said Michael Flory, of realty firm Flory Associates. All those people wanting to live in the county keep demand for land high. Flory has seen farmland prices in Douglas County rise over the past two years, and hasn't noticed any drop recently, he said.
Many are attracted to the university and Lawrence's shopping, golf courses and other amenities, as well as the ability to live the country life outside of town, Flory said. In recent years he's seen more folks who "would like to have a small piece of land so they can grow their own produce," he said.