Friday, August 05, 2011
Land Prices: Where Are They Strongest
Farm real estate across the US increased nearly 7% in value from 2010 to 2011. That includes a nearly 16% increase in Cornbelt farmland values to a 2% decline for farmland in the southeastern US. While cropland values increased over 9% across the US, the value of pasture rose nearly 2%. Land values continue to increase because of demand, which is spurred by higher commodity prices and investors looking for alternative sources of income.
USDA just released its annual survey of farmland values which shows continued growth from 2009, which had dipped slightly after the commodity price-driven increases in 2008. When land and buildings are combined, the average price of US rural real estate is $2350 per acre, with the highest values of $4690 per acre in the northeastern US. When cropland itself is broken out Cornbelt acreage has a $3030 value per acre.
For a discussion of the dynamics that affect farmland values, see the August 4 edition of Farmgateblog.com.
Across the Cornbelt, farmland (crops and pasture) recorded values and increases from 2010:
Illinois $5700 up 16.3%
Indiana $4800 up 11.6%
Iowa $5600 up 24.4%
Kansas $1250 up 13.6%
Michigan $3850 up 5.5%
Minnesota $3350 up 12%
Missouri $2530 up 7.7%
Nebraska $1780 up17.1%
North Dakota $980 up 5.3%
Ohio $4300 up 7.5%
South Dakota $1100 up13.4%
Wisconsin $4050 up 8%
The value of farmland and buildings has varied widely among many states in the period from 2009 to 2010. (USDA computed the value by multiplying the average value of farm real estate by the land in the farms.)
Illinois $130,830 up 8.2%
Indiana $63,640 up 7%
Iowa $138,600 up 16.9%
Kansas $50,820 up 6.8%
Michigan $36,500 down 2.7%
Minnesota $80,431 up 4.2%
Missouri $68,385 up 6.8%
Nebraska $69,312 up 13.4%
North Dakota $33,660 up 9%
Ohio $54,800 up 2.3%
South Dakota $42,389 up 9%
Wisconsin $57,000 unchanged
Summary:
Throughout the Cornbelt, land and farm values are rising because of increased demand, very few sales, higher rents earned by farmland, and high commodity prices that make land more valuable. With current low interest rates, more buyers are potentially eligible to purchase land, and high value land continues to rise in price. The increased prices are seen throughout all of the Cornbelt states.
Posted by Stu Ellis on 08/05 at 12:00 AM | Permalink
Comments
Posted by: Precision Planting at August 5, 2011 10:10PM
Wow, they sure have gone up where we are in Nebraska.