According to a recent report from the U.S. Department of Agriculture (USDA), American farmland values are continuing to rise to record levels. This marks the third consecutive year of increasing farm real estate and pasture values, reflecting the overall trend over the past 14 years. Average cropland values have also rebounded to 2015 numbers.
USDA National Agricultural Statistics Service’s Land Values 2018 Summary shows the national average for farm real estate values has increased from last year by 1.9 percent, to $3,140 an acre. The value of farm real estate is now more than double what it was in 2014. California’s farm real estate values increased by 3.4 percent compared to last year. The average value is $9,000 per acre, making it the fifth most valuable in the country.
After two years of stagnation, American cropland values grew by 1 percent from last year back to a previous high of $4,130 per acre that was last seen in 2015. California remains the second most valuable state in terms of cropland value at $11,740 an acre. The increase in value demonstrates an overall growth of four percent from 2017.
Average U.S. pastureland values have also experienced significant growth over the past 14 years. Values increased by three percent in 2018 to $1,390 an acre. California has remained steady over the past four years, remaining at a value of $2,700 per acre.
The increase in American farmland values comes at a tumultuous time for farmers. The overall impact of the trade dispute with China, the uncertain future of NAFTA and the ongoing debate in Congress regarding the 2018 Farm Bill are all significant causes for concern among the industry. To add to those issues, farm income may drop nearly six percent this year to $59.5 billion, according to a USDA forecast that was released in February. The USDA will be updating the overall profit outlook at the end of August that will take into account the recent developments in foreign trade.