The inaugural South Dakota Land and Lending Conference will take place Friday at the Denny Sanford PREMIER Center in Sioux Falls.
The all-day event is organized by the Land Valuation and Rural Real Estate Affinity Group of South Dakota State University’s Ness School of Management and Economics.
“This Affinity Group represents the diverse professions that intersect in this economic sector, including land and real estate appraisers, lawyers, mortgage bankers, brokers and property and land managers. Pivoting during the COVID-19 pandemic, Ryan McKnight, a lecturer in our school, facilitated discussions via Zoom that brought focus to common interests in top-of-mind issues. From this group, and with his leadership, a conference committee helped to design the one-day conference,” said Eluned Jones, professor and director of the Ness School of Management and Economics.
Brent Gleeson, a U.S. Navy SEAL combat veteran and award-winning entrepreneur, is the keynote speaker.
In addition to discussions on economics and real estate, SDSU’s Matt Elliott will join Mykel Taylor and Wendong Zhang to talk about agriculture land values.
Taylor is the Alfa Endowed Eminent Scholar at Auburn University while Zhang is an associate professor in the Department of Economics at Iowa State University. Zhang leads Iowa State’s land value survey and noted that an Iowa farm recently sold for $22,000 per acre.
“I will talk about the determinants of the driving factors of the general farmland market—interest rates, government payments and trade,” Zhang said. “I will make some comments on what we see in terms of farmland return and how that compares with other assets, such as stocks, especially now that we are facing some inflation pressure, which also explains why investors are more interested in farmland as an investment.
“I also want to talk about pending legislation, “American Families Plan”—the potential changes in capital gains and estate tax plans for farmland sale and transfer that potentially could affect a lot of the farmland owners, ag professionals and all of those who work with farmers,” he continued.
In addition to their academic positions, Elliott and Taylor both use their experience as landowners as references.
“The whole prospect of owning ag land, managing it and just understanding the dynamics of that market kind of came along after inheriting a family ranch,” Taylor said. “That experience made my research just all that much more relevant. Every farmer cares about their land and knows what it’s worth.
“I want attendees to have a greater appreciation for the differences in land markets as we move around the country,” she continued. “My talk is not going to be specific to South Dakota but, by talking about different places, we can gain a bigger appreciation for the fact land markets are local, and we can't necessarily talk about land markets in a big, general way.”
An agriculture economist by profession, Elliott studies the long-terms changes in agriculture land value, which he said is often the biggest component in farm balance sheets and one that can rise fairly quickly.
“I think most people probably have a general feeling of why land values change,” Elliott said. “Some might be surprised by how fast they might increase. I think it's good to understand the market factors on changes in land values and changes in rent, and be able to somewhat anticipate when those changes can occur.
“It's challenging because there are a lot of recent increases in value in land and people want to expand or bring one of their children into the farm but there isn’t enough access to land in order to do that,” he continued. “It’s one of those things that they get really frustrated with if land values are increasing too much and they feel like they have to put a lot of money in compared to what they can generate from the farm. That's always the difficult part, but it’s part of what they have to understand and anticipate. And then, be prepared to act if there's a good opportunity or to not act if there's not a good opportunity.”