Commodity prices may be down, but land prices remain on the rise, according to the latest USDA Land Values Summary, published Aug. 1, 2014.
The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $2,950 per acre for 2014, up 8.1% from 2013 values. Regional changes in the average value of farm real estate ranged from a 16.3% increase in the Northern Plains region to a 1.1% increase in the Southeast region. The highest farm real estate values were in the Corn Belt region at $6,370 per acre. The Mountain region had the lowest farm real estate value at $1,070 per acre.
A state-by-state analysis reveals land values spiked most in the Dakotas. North Dakota and South Dakota were the No. 1 and 2 gainers, with respective increases of 22.5% and 17.4%. Kansas was third with a 17.1% increase.
U.S. cropland value increased by $290 per acre (7.6%) to $4,100 per acre from the previous year. In the Northern Plains region, the average cropland value increased 13.6% from the previous year. However, in the Mountain region, cropland values decreased by 5.1%.
The United States pasture value increased to $1,300 per acre, or 11.1% more than 2013. The Southeast region had the smallest percentage increase in pasture value, 0.5% more than 2013. The Northern Plains had the highest increase at 26.5%.
Mike Walsten, Pro Farmer LandOwner Editor, says land auction prices have been red hot in 2014. A few recent examples have included a $19,700 an acre in Northern Iowa, acreage in Nebraska that went for as much as $10,400, and a series of central Illinois farms sell between $10,000 to $14,000 earlier this year, he says.
Illinois may be home to one of the next hot farm auctions, explains Kenny Schum, a Murray Wise Associates agent preparing a September 12 auction of 294 acres of productive farmland in McLean County (Ill.).
"It isn't every day you see a Central Illinois farm like this with good soils, an excellent productivity record and on-site grain storage and sheds, as well as a house," he says. "The auction includes 272 tillable acres, with the cropland primarily on two of the three tracts."
For more information on land values, including average cash rent by state, expert analysis and more, visit the AgWeb Farmland Value Guide. Visit the AgWeb Markets & Economy forums to catch up on land value and cash rent trends, grain-marketing strategies and more.