Ag land values see largest increase in value since 2006
The average value of U.S. farmland jumped more than 12 percent this year alone. That represents a $420 dollar increase over 2021. Ag statisticians at the USDA say that this is the largest increase since 2006.
According to Tony Dorn with National Agricultural Statistics Service, “The last increase was in 2006 at this magnitude of 14 percent for all farmland and back in the late 70s and 80s there was quite a few years land increase this much...”
The largest value increase happened in the western Corn Belt and Central Plains.
Now, if you lack the cash flow to purchase land, a cash lease could be the next big thing. Last year, the average cost to rent an acre of cropland was $128 dollars per acre. It is now $135 dollars per acre.
“It’s always interesting because the cash rents are a survey of what are you paying for your land right now in terms of cash rent, and that those rents are often established in the fall of the prior year. Versus, when they ask about land value. It’s an assessment of what is the land value worth today. So last year, at this time, we had quite a big increase in land values and a much more modest increase in rents. And that made sense at the time because it was in the middle of the summer last year,” USDA’s Seth Meyer explains. “Remember, commodity prices had just begun to rise in the fall of 2020, and so there was some thought, hey, maybe land rents simply hadn’t had been agreed to before we started to have this run in commodity prices.”
He says that the increases for cash rent did not rise as sharply as cropland values this year.