Farmland Real Estate Values Hit Record High
Daniel Munch
Economist
Chad Smith
Associate News Service Editor, NAFB
photo credit: AFBF Photo, Morgan Walker
Daniel Munch
Economist
Chad Smith
Associate News Service Editor, NAFB
A new USDA report on farmland shows the highest values in history. Chad Smith has the numbers.
Smith: USDA’s Land Values Summary confirmed another increase in the value of U.S. farmland. Danny Munch, an economist with the American Farm Bureau Federation, said the value rose 4.3 percent or $180 per acre.
Munch: Bringing the national average to a record high of $4,350 per acre. This marks the fifth-consecutive year of land value increases, though the pace has slowed over the years. Cropland values rose by 4.7 percent to $5,830 per acre, and pastureland values climbed five percent to $1,920 an acre.
Smith: Cash rents also hit record high levels, rising 0.6 percent to $161 per acre. Munch said the slower rise in land prices compared to previous years is due to multiple factors.
Munch: As commodity prices have receded and the farm income picture has been more uncertain, that has caused land price increases in the ag community to deflate or be more uncertain. Unlike prior years when Midwest row-crop states saw double-digit increases, we actually saw no double-digit increases across states this year. The biggest increases were in Michigan, Tennessee, and South Dakota.
Smith: He said these changes in value will have a mixed impact on U.S. agriculture.
Munch: On the positive side, continued increase in real estate values means that the primary asset many farmers own, which is land, has grown in value. That means it really strengthens the balance sheet and can improve access to credit. On the other side, that rate of growth has slowed, so that means the expansion of equity has also slowed.
Smith: Learn more on the Market Intel page at fb.org. Chad Smith, Washington.
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