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WASHINGTON — Farm real estate values, a measurement of the value of all land and buildings on farms, averaged $1270 per acre as of January 1, up $60 or five percent from the previous year, says USDA’s National Agricultural Statistics Service. The value of farm real estate increased in all states except Kansas, where values remained at 2002 levels. The $60 per acre increase in farm real estate values continued an upward trend that began in 1987. The increase in all land and buildings followed the trend of cropland and pasture values, which rose by 4.2 and 5.1 percent, respectively, from January 1, 2002. Cropland values averaged $1720 per acre and pasture values averaged $618 per acre on January 1, compared with $1650 and $588 per acre, respectively, a year earlier. The increases in farm real estate and the cropland and pasture components were largely, though not entirely, driven by low interest rates and poor returns for alternative assets, the government says . The certainty of government commodity programs also lent support to some agricultural land. Potential for non-agricultural uses contributed to strong increases, especially for pasture values. Income from crop and livestock commodities was mixed, providing limited support for farm real estate values in some areas, while creating a slight drag on values in other areas. Regional increases in the average value of farm real estate ranged from 3.4 percent in the Pacific region to 7.6 percent in the Great Lakes region. The highest farm real estate values were in the Northeast region, where urban influences drove the average value to $2950 per acre. In the Appalachian and Southeast regions, where urban and recreational influences are increasing, farm real estate values rose 7.1 percent to $2420 per acre. The Mountain region, with its expanse of pasture and rangeland, has the lowest farm real estate value, at $526 per acre. Cropland values rose 4.7 percent, to $2450 per acre, in the Cornbelt and 2.6 percent, to $738 per acre, in the Northern Plains. Together these regions account for about half of total U.S. cropland acres. The highest average cropland values, at $3720 per acre, are in the Pacific region, where a significant portion of the cropland is irrigated. Dollar values and percentage increases of farm real estate, cropland, and pasture for states along the East Coast and Great Lakes are the largest in the country. Despite severe agricultural drouth in several of these states, price competition from rapid urbanization and development has more than offset any downward pressures on land values due to poor agricultural returns. Pasture values, in particular, outpace those of cropland in many of these states, mainly due to its greater appeal and availability for development and recreation. Cropland values varied widely across states due to geographically specific circumstances and competitive uses of land. The impact of suburban growth and resorts contributed unevenly in rural mid-western states, influencing values in isolated areas only. In these states, increases in cropland values were more closely tied to 2002 crop production, prices received for crops sold during 2002, and the certainty provided by government commodity programs, especially for major crops. |
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