Farmland Values Rise Across the Country

Farmland values

The demand for productive agricultural land nationwide is accelerating at a pace not seen in years. As a result, farmland values have increased over the last 12 months throughout much of America! That's what they say here on their annual report from USDA-Agriculture Department--and there are more conclusions about it down below with plenty of additional data to bootstrap your reading pleasure (or liability).

According to the National Agricultural Statistical Survey (NASS) Land Values 2021 Summary, farm real estate values – a measurement of all land and buildings on U.S farms--averaged $3,380 per acre in 2020. This amount went up by 7% in average last year alone: from 1-2020’s total number at 3378/acres2 towards somewhere between 3411 acres worth around thirty-four hundred dollars ($3400). Cropland values rose an additional 7%. According to the USDA, values haven’t risen at this pace since immediately following The Great Recession. This increase may be a result of economic growth in all three land-use categories which has led them up from their recent low point six years ago.

EXPLOSION IN PRICES

FAVORABLE MARKET CONDITIONS

The explosion in prices has been nothing short of amazing to watch. However, according to Texas A&M’s Charles Gilliland, a research economist with theTexas Real Estate Research Center says that they've seen an increase of over 3% per month for demand all kinds of land which is unprecedented and can be attributed largely due to rising population rates coupled with low-interest rates making it more affordable than ever before! This may not be a bad thing either: USDA projections at the end of their article linking back to the beginning here show that farm real estate values will continue to climb next year hitting near $3,500 per acre.

If you’re thinking about adding some farmland to your portfolio, now may be a good time. Of course, it’s always better to have a professional-grade real estate agent on your side who can help you find the best properties and negotiate a great deal for you too.

Gilliland’s comments on Texas farmland values are applicable to numerous other states throughout the country, with values increasing by nearly 10% and pastureland and cropland seeing gains of approximately 7%.

Texas' premier is focused primarily in land activity within the Lone Star State; however, his observations can apply nationwide. Farmland indicators such as those seen recently had increased 9%, up from last year's figure (2016), while pastures experienced an increase too - 6%.

For example, despite severe drought conditions on the West Coast, farmland values rose 9% in California and more than 10% for Oregon. A wide swath of states throughout the Midwest - led by Iowa Kansas Minnesota Nebraska Wisconsin witnessed across-the-board increases that reached double-digit numbers! In some cases, they were even high enough to be considered " Exceptionally High."

In addition, there was significant growth reported from areas such as Colorado Idaho Utah Rocky Moutain Region & many others too numerous to mention here...

The past year has been a good one for landowners, especially those living in rural areas. Gilliland attributes this to several government programs that were implemented following the COVID-19 pandemic and the recent trade war with China which have benefited farmers across America. Low-interest rates and high commodity prices also caused land values to rise while popular migration patterns from city dwellers into more scenic locations means there is demand even during economic downturns--even if they don't always last very long!

“The primary complaints I hear from real estate brokers is that they have plenty of people lined out the door looking for properties, but don’t have enough inventory to sell them. The problem with this? That means there's less competition and higher chances at getting your property sold quickly," says Gilliand

"That said though - if you're not sure what kind of location would be best suited towards meeting client needs; contact me! My team can help make suggestions based on accurate data obtained through research about neighborhoods' demographics, economics (such as unemployment rate), lifestyles, etc., which may affect buyer behavior when searching online."

The demand for larger acreage has caused an increase in land sales that are then divided into smaller 10- and 20-acre tracts. Many buyers purchase these individual lots because they want to move out of big cities, which can be attributed as a COVID effect from not spending money last year during the crisis period but now bidding up prices on any available property even if it's small or medium-sized plots."

Some of the biggest gainers in farm real estate values:

Massachusetts led the nation with a staggering 21.2% increase, followed by Nebraska at 11%. Kansas rose 10.5%, Oregon gained 10 3%, Vermont increased 9 .9%.

PLAINS GAINS [ 9.4% ]

In the Northern Plains region of Kansas Nebraska North Dakota, which had been hit hard by COVID-19 tornado activity during the pandemic, had a huge increase in farm real estate values going from $ 2,690 an acre last year to nearly $ 3,500 per acre this year. This figure does not include the effects of the recent trade war or government programs' price supports, for example.

The Delta States, which include Louisiana South Carolina Mississippi Tennessee, recorded mainly average to below-average gains with an exception in Arkansas where pastures rose by 8% and prices by 5%. Farmland values in this region were around $ 1,000 per acre.

MONTANA GAINS [ 5%]

In the Rocky Mountain Region of Montana, acreage property values rose from $ 1,590 per acre to more than $ 1750 an acre. This value represents a nearly 8% increase over last year. "The primary complaint I hear from real estate brokers is that they have plenty of people lined up looking for properties, but don't have enough inventory to sell them. The problem with this? That means there's less competition and higher chances at getting your property sold quickly," says Gilliland.

COLORADO GAINS [ 4%]

Colorado experienced a gain in real estate value of nearly 4%. Prices were reported to be $ 1,490 per acre for non-irrigated land and $ 1,810 per acre for irrigated.

THE SOUTH GAINS [ 3%]

The South saw average gains in real estate values this year. Louisiana rose by 3% to $ 930 an acre, Tennessee increased 7%, North Carolina was up 3 %, Alabama rose 2%. Some of the most popular states for migrating city dwellers included Florida, Texas, and Georgia.

The four-state Northern Plains region — Kansas, Nebraska, and North Dakota to be precise (North=Northern; Colorado is also considered part of this area) saw an impressive 9.4% increase in crop production over the last year while Louisiana only recorded 1%.

The Delta States managed average growth rates between 3% for cropland values according to data collected by USDA's Economic Research Service (ERS). The largest increases were observed within individual states which include Arkansas up 8%, Tennessee at 7%, South Carolina 6 % Montana 5%"

The data showed that Iowa had the largest increase in pastureland value at 12.3%, followed by Wisconsin with 10%. Utah was last at 9% but it still has some of America's best beef producers which makes up for its lackluster dairy industry?

And what about Michigan? The Lake States region also includes Minnesota and North Carolina where farmland values are on their way back after falling over 30%.

Despite the ups and downs of land prices, one thing is for sure: they're not going down anytime soon. Analysts say that there are no indications this trend will end any time soon - meaning if you want to invest in real estate then now may be your chance!

"There seems to be a lot of optimism about the land market for years to come," says Taylor. "Most appraisers expect it will stay strong."

Texas A&M’s Gilliland agrees. "For the near future, this is probably sustainable given our demand situation with not a lot of inventory," he says."People are waiting for the music to stop but there's nothing on our horizon that indicates it will happen anytime soon- just an amazing time being involved in a land market!