Your Precious Land
Mike Walsten has covered major business trends in agriculture for more than 40 years.
18% Surge in North Dakota Cropland Values
Apr 05, 2012
The value of North Dakota cropland jumped 18% on an annual basis, according to a survey conducted by the North Dakota office of the National Agricultural Statistics Service in January, 2012. “By any measure, it has been a historical run for farmland values,” says Andy Swenson, North Dakota State University Extension Service farm management specialist. “Since 2003, cropland values have increased at an average annual rate of about 13%, with the sharpest increases occurring since 2007. This surpasses an eight-year period of strong growth in the 1940s. The strongest run up in cropland values during the past 100 years was a nine-year period (1973 through 1981), which averaged 18% annually. However, land values then dropped 40% from 1981 through 1988. It was 24 years (2005) before values again reached those that were achieved in 1981.”
The prime drivers behind this strong upswing in land values are the usual suspects -- very profitable crop production and low interest rates.
The largest increase in cropland values was 28% in the southeastern region (to $2,120), followed by increases of 22% (to $2,195 per acre) in the northern Red River Valley, and 17% to 19% for the east-central (to $1,425), southern Red River Valley (to $3,083) and the northeastern regions (to $1,246). Cropland values increased 15% in the south-central region to $1,017. The smallest increases, 12% to 13%, occurred in the northwestern region (to $666), southwestern region (to $816) and north-central region (to $1,032).
“The survey indicated that land rents, as typical, did not change as much in percentage as land values,” Swenson says. “On average, cropland rents increased about 6%. This was still a strong increase from a historical perspective.”
If interested in seeing a copy of LandOwner, just drop me an email at firstname.lastname@example.org or call 800-772-0023.