Pro Farmer Extra
- From the Editors of Pro Farmer newsletter -
A close look at a couple of trends in farmland values
May 3, 2012
Professional Farmers of America also publishes LandOwner newsletter. LandOwner editor Mike Waslten was all over a couple of important stories about farmland values this week and agreed to let us bring you the highlights from a couple of his blogs that appeared on Pro Farmer's website this week.
Survey: Iowa Cash Rents Rise 18% in 2012
Now we have numbers to put on what everyone has been talking about -- the state average cash rent in the state of Iowa rose $38 an acre, 18%, in 2012, according to an annual survey conducted by Iowa State University (ISU). The survey found the state average cash rent rose to $252 an acre. "This is the largest one-year increase since the statewide survey was started in 1994," states Willaim Edwards, ISU extension economist, who directs the annual survey. The second-largest increase was recorded in 2011 when the survey found a $30-per-acre increase.
"Average rents were higher in all nine crop reporting districts, with increases ranging from $57 per acre in north central Iowa to $16 per acre in south central Iowa." states Edwards. The $57-per-acre increase in the north central district represents a 26% increase. The $16-per-acre increase in the south central district represents a 9% increase.
High-quality land showed the largest increase in rents. Estimated rents for land in the high-third of each county increased by an average of 20%. but estimated rents on low-third quality row-crop land increased by only 15%. "In many counties, respondents indicated that typical rents were $400 to $500 per acre or more for the higher quality land," Edwards observes.
What's Behind that Puzzling 5% Decline in MN Farmland Values?
The median value of Minnesota farmland fell 4.9% to $3,443 an acre in 2011, according to an analysis of agricultural sales transactions reported to the state's Department of Revenue conducted by University of Minnesota ag economist Steven Taff.
The figure calculated represents the median value of actual land sold. But the number of sales of high priced southern Minnesota farmland fell sharply in 2011, which resulted in depressing the state median price. For example, only 87 transactions were reported in the south west region for 2011, down from 266 transactions in 2010 and the lowest since 1990 when 408 transactions will be reported.
In the south central region, 155 transactions were reported in 2011, down from 294 in 2010 and the lowest since 1990's 412. Same for the south east region which reported only 127 transactions in 2011, down from 198 in 2010 and 429 in 1990. For the state as a whole, only 1,115 acres were reported, down from 1,882 reported in 2010 and the lowest since 1990's 3,158.
In my mind, the news in this report is the confirmation of the sharp decline in the number of high-producing Minnesota corn/soybean farms offered for sale in 2011.
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