The USDA just released their annual farmland report (Summary of Land Values and Cash Rents) and per usual, it contains some interesting facts and trends. The data for this report is gathered by surveying agricultural producers throughout the different regions of the country. This method is slightly different than many other land value reporting agencies, e.g. The Federal Reserve Banks, where bankers are the main source of information.
As could be expected, land prices and rents both moved higher across most the U.S. (the exceptions being in the Mountain States and the Southeast). Most of the Midwestern states have rebounded from the cropland price correction of 2008-2009 and are now just below the all-time high levels set in 2008. Cash rents are also at all-time highs according to the information gathered. Analysis of the numbers over the past 5 years reflects a 27% increase in cash rents along with a 29% increase in cropland prices. These are numbers that most financial advisors (and their clients) would have killed for during this time period. Yes, farmland continues to be the envy of the investment world!
It is important to note that these are average numbers across entire states and may not be indicative of what the market is in any single small area. Because of that, I think the general trend in values has merit even though the absolute numbers may not for your specific farm.
Tags: agriculture, farmland, investors, land value, midwest
