The USDA says farmland prices are setting new records. [PDF] Every year, the USDA takes a look at farmland prices, and the new report says while urban housing prices are soft, farmland prices are firm.
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Pastureland is also way more valuable than just a year ago. You have to wonder if county governments, which survive off of property taxes, will see a windfall -- or are farmlands "grandfathered" from reassessments? The new report may also awaken landowners who lease their property to farmers to jack up their prices.
The USDA said:
Farm real estate values, a measurement of the value of all land and buildings on farms, averaged $2,350 per acre on Jan. 1, 2008, up 8.8 percent from 2007. The $2,350 per acre is a record high and $190 more than a year earlier.
Both cropland and pasture values for 2008 are record highs. Cropland values rose by 10 percent to $2,970 per acre, up from the previous high of $2,690 in 2007. Pasture value rose by 6 percent to $1,230 per acre.
While commercial and residential development has slowed in many regions, farm real estate values continue to increase. Strong commodity prices and farm programs, outside investments, favorable interest rates, and tax incentives continue to be the factors that drive farm real estate values to record levels. Livestock prices, recreational use, and urban development remain the predominant influences that increase pasture land values.
Regional increases in the average value of farm real estate ranged from 1.6 percent in the Northeast region to 15.5 percent in the Northern Plains region. The highest farm real estate values remained in the Northeast region, where development pressure continued to push the average value to $5,080 per acre. The Northern Plains region had the lowest farm real estate value, at $1,110 per acre, up 15.5 percent from the previous year. In the Corn Belt region cropland values rose 14.8 percent, to $4,260 per acre. The Southern Plains region increased 12 percent from the previous year, to $1,490 per acre.
The Northern Plains region also had the highest average percentage increase in pasture value, 19.7 percent above 2007. In the Southern Plains and Mountain regions, which account for more than half of the pasture in the U.S., pasture values per acre increased 17.1 percent and 6.4 percent, respectively.
Bloomberg said other businesses such as tractor and truck sales or farm chemical stores may benefit from the increases in land prices.
Might be interersting to talk to land preservation groups about...
