Posting its slowest rate of increase since 1996, South Dakota recorded an annual increase of 5.2% from 2009 to 2010, according to the South Dakota Farm Real Estate Market Survey. From 2001 to 2008, agricultural land values increased more than 10% each year, including more than 20% in 2005 and again in 2008, write Larry Janssen, Burton Pflueger and Emmanuel Opoku, who conducted the survey at South Dakota State University. From 1991 to 2000, annual increases in South Dakota farmland values varied from 4% to 10%.
The survey found cropland values increased at a higher rate than for any other agricultural-type land. Cropland increased 6.8% statewide compared to increases of 4.6% for hayland and 1.9% for rangeland. The strongest increases (gains in excess of 10% for each land use) occurred in the north-central region, the survey notes. Land value changes were positive for each type of land use in the southeast and northwest regions. In all other regions, land value changes were mixed.
Farm expansion and investment potential continue as the major reasons for purchasing farmland, the survey found, while retirement from farming, settling estates and realizing gains from high sale prices are the major reasons for selling farmland.
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