california economic

Farm Real Estate Levels Remain Near Record Highs

Dan Economy, Industry News Release

Farm real estate values remain near record levels set in 2015, despite a significant drop in farm income and a weak farm economy.

american farmlandThe Department of Agriculture’s Economic Research Service says the value of U.S. farm real estate is a critical barometer of farm financial performance, that’s because farm real estate, including land and the structures on the land, generally accounts for over 80 percent of U.S. farm sector assets, and often serves as collateral for farm loans.

After a long period of appreciation following the farm crisis of the 1980s, farm real estate values have leveled off in recent years. USDA research indicates that, in general, the substantial growth in farm real estate values since 2000 was attributable to high farm earning potential and historically low interest rates.

In 2000, after adjusting for inflation, average U.S. farm real estate values were $1,541 per acre—and reached a historic high of $3,178 per acre in 2015. By 2018, U.S. farm real estate values averaged $3,140 per acre, with the leveling off in recent years coinciding with declines in farm sector income.

Source: National Association of Farm Broadcasting News Service.