Cynthia Nickerson, Mitchell Morehart, Todd Kuethe, Jayson Beckman, Jennifer Ifft, and Ryan Williams
Because farm real estate represents much of the value of U.S. farm sector assets, large swings in farmland values can affect the financial well-being of agricultural producers. This report examines both macroeconomic (interest rates, prices of alternative investments) and parcel-specific (soil quality, government payments, proximity to urban areas) factors that affect farmland values. In the last few years, U.S. farmland values have been supported by strong farm earnings, which have helped the farm sector in many regions to withstand the residential housing downturn. Historically low interest rates are likely a significant contributor to farming’s current ability to support higher land values. About 40 percent of U.S. farmland has been rented over the last 25 years. Non-operators (landowners who do not themselves farm) owned 29 percent of land in farms in 2007, though that proportion has declined since 1992. Read more.
Agricultural Land Values Highlights
The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,020 per acre for 2015, up 2.4 percent from 2014 values. Regional changes in the average value of farm real estate ranged from a 6.1 percent increase in the Southern Plains region to 0.3 percent decrease in the Corn Belt region. The highest farm real estate values were in the Corn Belt region at $6,350 per acre. The Mountain region had the lowest farm real estate value at $1,100 per acre.
The United States cropland value increased by $30 per acre (0.7 percent) to $4,130 per acre from the previous year. In the Southern Plains region, the average cropland value increased 9.2 percent from the previous year. However, in the Corn Belt region, cropland values decreased by 2.3 percent.
The United States pasture value increased to $1,330 per acre, or 2.3 percent above 2014. The Southeast region was unchanged from 2014. The Lake States region had the highest increase at 15.4 percent. Read more.
Image credit: (lower left) By Ibagli – Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=8043010