USDA: Farm Real Estate Declined 3.2% in 2008
Aug 04, 2009
The value of all farm real estate, which includes all land and buildings on farms, averaged $2,100 per acre as of January 1, 2009. That's down 3.2% from 2008, according to USDA's annual survey of land values and cash rents. Keep in mind the eight-month lag in releasing the data from the "as of January 1" date. But the survey does pick up the weakness that swept across the farmland market the last third of 2008. It also shows the Plains states held values firmer than areas more heavily impacted by the overall economic downturn and floundering housing market, such as the Northeast, Cornbelt and Mountain regions.
The full USDA/NASS report can be found here.
The report also indicated that cash rents for cropland rose $4.50 per acre, or 5.3%, while pasture rents remained unchanged for the 2009 crop and grazing year. Cropland cash rents paid in 2009 average $90 per acre, compared with $85.50 per acre in 2008. Pasture cash rents average $10.50 per acre, consistent with the 2008 price but above the 2007 price of $10.00.
USDA said the 3.2% decrease in the value of all farm real estate from 2008 is the first decline since 1987. Regional changes in the average value of farm real estate ranged from virtually no change in the Northern and Southern Plains regions to an 11% decline in the Mountain region. The highest farm real estate values remained in the Northeast region at $4,830 per acre. The Mountain region had the lowest farm real estate value, $922 per acre.
Both cropland and pasture values are also down from the previous year, USDA said. Cropland values declined by $110 per acre (3.9%) to $2,650 per acre. In the Cornbelt region, the average value decreased 4% from the previous years, to $3,870 per acre. However, in the Northern Plains and Delta regions, cropland values rose 1.6% and 0.6%, respectively.
Pasture value declined by $20 per acre (1.8%) from 2008 to $1,070 per acre. The Mountain region had the largest percentage decrease in pasture value, 16% below 2008.
The contraction in the overall economy has caused less commercial and residential development in many regions. Livestock and crop commodity prices have decline from a year earlier, thus producers and investors are less optimistic than a year ago, said. A decrease in the demand for recreational land has also contributed to the overall decrease in land values, said USDA.
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