FARMLAND VALUES SEEN RISING
But Farrell remains bullish on farmland prices through early 2013.
Farmland fetched as much as $15,000 to $16,000 an acre in the Plains this fall, despite the worst drought to hit the United States, the world's top food exporter, in more than 50 years. In Iowa, the biggest crop state, an 80-acre parcel of crop land in northwestern portion of the state sold for a record $21,900 an acre in October.
"We don't see anything to slow the market down," said Farrell, noting that Farmers National, based in Omaha, sold $163 million in land just last month.
Farmers rushed to sell land over the past six months amid worries about higher capital gains taxes, he said. That could mean fewer farms for sale in the first quarter of 2013.
"If we have very few sales over the first quarter will that even stoke more demand?" he asked.
Asked about recent weather and climate risks, Farrell said a repeat of the drought in 2013 may have a negative impact on land values and the United States could lose its clout as the world's top supplier of food.
He noted that Farmers National, which currently manages 4,700 U.S. farms representing 2 million acres, is looking to expand into Canada as row-crop production moves north given changes in climate.
"We have several hundred farms on the Canadian border near Grand Forks, North Dakota, that we manage, so for us it's organic expansion," Farrell said. "We have not done business there but climate change will allow us to build if it continues."
(Reporting by Christine Stebbins; Editing by Bob Burgdorfer and Jeremy Laurence)