U.S. Farmland Prices Reach Record High

Farmland values continued to rise last year and are still reaching unprecedented levels in some sections of the country, despite accruing much smaller gains than in 2008. Dow Jones Newswires reports that a farmland index maintained by the National Council of Real Estate Investment Fiduciaries appreciated by 6.19% in 2009, a rate that was well below the 2008 return of 15.09% and in fact represented the indexes smallest annual gain in seven years.

Omaha, NE-based Farmers National Co., a professional farm management and auction firm, said top-quality cropland now sells for about $650 to $1,000 per acre in South Dakota; $800 to $2,500 in western Kansas and Nebraska; $2,000 to $4,000 in eastern Kansas; $3,500-$6,500 in Iowa, Minnesota and eastern Nebraska; and $5,500-$7,500 in Indiana, Illinois, Missouri and Ohio.

Land values, however, actually declined in some areas in 2009, including in Iowa, where prices fell for the first time in a decade. Iowa State University extension farm economist Mike Duffy said his annual survey discovered that Iowa farmland is now worth an average of $4,371 per acre, $97, or 2.2%, less than it was at the end of 2008.

One of the very weakest U.S. farmland markets developed in the South last year, where dryland farms are seeing prices in the $2,200-$2,700 per acre range and irrigated land is bringing $2,700-$3,400 per acre.