Average cropland and farm real estate values across the 15-state AgriBank District declined for the first time since the onset of the Great Recession in 2009, and pastureland values declined for the first time since 2010, according to U.S. Department of Agriculture (USDA) 2016 survey data. However, the decline in farmland values—due to considerably lower commodity prices that have fallen from record highs in the crops and livestock sectors—is at a moderate rate. This report highlights the latest farmland values and cash rents across the District, as well as looks
ahead to the future.
The Northern Plains states experienced the largest declines in cropland values from 2015
to 2016, while the southeastern states in the AgriBank District and Wisconsin experienced
growth. Figure 2 shows the percentage change in cropland values by state across the
District, with the average value and absolute dollar change in brackets. Among the states:
– North Dakota had the largest percentage decline (-6.5 percent), followed by South Dakota (-5.6 percent) and Nebraska (-4.3 percent). Some of this reduction can be attributed to the decline in crude oil and energy markets, particularly for North Dakota. Additionally, declines in wheat and minor feed grain prices contributed to the drop in cropland values.
– Wisconsin (+$200) had the largest increase (with its strong dairy industry being a contributing factor) and, along with Arkansas, Kentucky, and Tennessee, most likely saw an increase in cropland values due to the strong recreational and urban expansion components in their land markets.Also, the diversity of crop production in these states continues to support values while states that have cropland concentrated in corn and soybean production (such as Iowa and Illinois) have seen values decline with the lower price levels for both crops.
In terms of average value per acre, Iowa also was the highest ($8,000 per acre), followed by Illinois ($7,450) and Indiana ($7,000). The lowest values were in the Northern plains states of Wyoming ($1,370), North Dakota ($2,000), South Dakota ($3,520) – and Arkansas ($2,710).
Figure 3 shows the state percentage changes (average value per acre and absolute dollar
change in brackets) for pastureland values across the District.
– Arkansas (+7.0 percent) had the largest percentage increase, followed by Nebraska (+4.6 percent) and South Dakota (+4.1 percent). As with cropland, states with a strong recreational and urban expansion component tended to do better than others. Also, states with a strong dairy (Wisconsin and South Dakota) and beef industry (Nebraska) presence tended to do better
– Illinois (-4.2 percent) had the largest percentage decrease, followed by Michigan (-3.0 percent) and Minnesota (-2.9 percent)
-In absolute dollar terms, Arkansas (+$160) also had the largest increase while Illinois (-$150) had the largest decline among the District states
In terms of average value per acre, Tennessee was the highest ($3,540), followed by Iowa ($3,400), Illinois ($3,400), and Ohio ($3,100). The lowest per acre values were found in the Northern Plains states of Wyoming ($510 per acre), North Dakota ($830), Nebraska ($910) and South Dakota ($1,020).
CROPLAND CASH RENTS
Figure 4 shows the percentage change in average cropland cash rents by state across the District, with the rate per acre and absolute dollar change indicated in brackets.
– Minnesota (-6.1 percent) had the largest decline, followed by Iowa (-6.0 percent) and Nebraska (-4.9 percent)
– In absolute dollars, Iowa had the largest decline (-$15 per acre), followed by Minnesota (-$11) and Nebraska (-$10)
– Michigan (+$9 or +7.6 percent) and Wisconsin (+$3 or +2.2 percent) were the only states to show increases in cropland cash rents from last year
For the average cropland rental rates per acre, Iowa had the highest rate ($235), followed by Illinois ($221), Nebraska ($196) and Indiana ($192). The lowest rental rates were in Wyoming ($62) and North Dakota ($68). The average rents in the District states were substantially higher compared to states outside the District ($143.47 versus $98.77 per acre), despite declining by more than the national average (-6.4 percent versus -5.6 percent). Revised figures for 2015 reversed a decline that USDA reported last year for cropland average cash rents.
PASTURELAND CASH RENTS
Figure 5 shows the percentage change in cash rents per acre for District pastureland. The District average rental rate declined by $1.23 per acre (-4.2 percent) compared to the U.S. average decline of $1.00 (-7.1 p ercent). Among the District states:
– Arkansas (+11.1 percent) had the largest percentage increase, while Nebraska (-15.8 percent) had the largest percentage decline
– In dollar terms, Iowa, Minnesota and Arkansas tied for the largest increase (+$2) in average pastureland cash rental rates
– Only four states declined in rates, with Nebraska showing the largest decline (-$4.50/acre), followed by South Dakota (-$3), Missouri (-$2) and North Dakota (-$1)
In terms of per acre cash rent rates, Iowa had the largest average ($52), followed by Illinois ($36) and Wisconsin ($35). North Dakota had the lowest rate ($17), followed by Arkansas and Tennessee ($20).
A full report of the AgriBank District can be found here.