Cropland Values Higher Than Ever

A recent report from USDA said that U.S. farmland values have hit a record high, according to Brownfield.  Farm real estate on January 1, 2008 averaged $2,350 per acre, up $190 or 8.8% from the January 1, 2007 average. 

Record or near record commodity prices, increased government and private investment, low interest rates and tax incentives offsetting declining commercial and residential development are responsible for the increase, USDA said.

By region, the biggest rise in farmland values was in the Northern Plains at 15.5%, with the lowest in the Northeast at 1.6%.  No region saw a year-to-year decline, with a handful of individual states lower and a couple holding steady.

Cropland values averaged a record $2,970 per acre, 10% above last year’s then record. The region with the biggest increase was again the Northern Plains at 18.8%, while the smallest increase was in the Pacific region at 2.8%.  Similar to farmland values, no region declined in cropland average, but a handful of states were steady-to-down around 5%.

In the Cornbelt, cropland values were up 14.8% to $4,260 per acre, with real estate at $3,910 per acre, an increase of 13.3%, and pasture land at $2,220 per acre, 10.4% above the 2007 average.

U.S. pasture land values were reported at an average of $1,230 per acre, 6% higher than the 2007 average of $1,160.  Pasture land values in the Northern Plains were up an average of 19.7%, while the average value was down 1.5% in the Southeast.  No individual state in that region saw a decline of more than 4.3%.

The national average for cash rents on cropland was up 13% or $11, for an average of $96 per acre, with the highest regional average for the Pacific at $230 per acre, with irrigated land in California pushing that average higher.  The Cornbelt ranks second at $140 per acre.  Pasture rents gained $1 or 8.3% to $13 per acre.  The highest regional average is in the Cornbelt at $36 per acre.