Land across the nation is at historical high prices.
High land prices and values are making it hard to farm and many producers are wondering if the so called land bubble is about to break.
Ag Reporter Sarah Gustin has the story.
No doubt, it's a seller's market.
(Andy Swenson / NDSU Farm Management Specialist) "Going into 2013 things look pretty strong because crop prices are still up."
NDSU Farm Management Specialist Andy Swenson, says land values have been climbing steadily since 2004.
In fact times are so good, Swenson says in the past 100 years there has only been two other times land values rose this fast--back in the 40s and the 70s.
He says in 2012 land values rose nearly 48%.
(Andy Swenson / NDSU Farm Management Specialist) "Most people don't think we are going to have a bubble in the sense that you prick a balloon and it explodes. And the reason is a lot of the land that has been purchased has been with a fair amount of cash up front and people who have borrowed money are locking in because interest rates are low. "
Swenson says crop prices and interest rates could have major impacts in the year ahead.
"The two keys are crop prices and interest rates and of course yields in 2013. My gut feeling is we will see things slowing up maybe leveling off here."
A big part of keeping the land your farming is keeping your land lords happy.
Huot say more than 1/2 of the land that is being farmed in the state is rented.
(Willy Huot / Grand Forks Extension Agent) "Help them understand the dynamics of agriculture. Sometimes they've been away from the farm for 2-3-4 years, they quickly lose connection with agriculture. The day to day issues, the weather, prices all that. Whatever the landlords can do to stay informed on agriculture it helps them understand what some of the operators are going through."
Huot says in the next 25 years data shows nearly 75-80% of the land in North Dakota will be under new ownership.
Swenson says the average price for cropland in North Dakota is $1350 an acre.
He says the average pasture land price is about $500 dollars an acre.
Pifer's Auction and Realty sells land across the region.
Kevin Pifer says at the end of 2012 farm land and pasture prices rose nearly 30%.
Pifer says in North Dakota, if it's good cropland suitable for raising corn and soybeans, buyers are becoming more aggressive because of the huge demand for those crops.
He says the market for pasture is also very strong.
But he doesn't expect these high times to continue.
(Kevin Pifer / Pifer's Auction and Realty) "We think there is going to be a leveling off. If you take a look at the commodity prices right now with soybeans and corn and where that is headed. there is some fear of the drought obviously. We don't anticipate any type of a major correction, but we feel land prices are going to start leveling off as we get further in 2013."
Pifer says land prices in 2013 will depend on this year's crop and weather.
He says an average crop could cause land prices to rise, but says if the drought ends in the United States, the land market could weaken.
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