What Impact Will Higher Land Values Have On Farmers?

USDA’s recent Land Values Summary shows the value of American farmland has increased again.  Danny Munch, economist with the American Farm Bureau Federation, said the value rose 4.3% or $180 per acre.

“Bringing the national average to a record high of $4,350 per acre," Munch said.  "This marks the fifth-consecutive year of land value increases, though the pace has slowed over the years. Cropland values rose by 4.7% to $5,830 per acre, and pastureland values climbed five percent to $1,920 an acre.”

For the Northwest states, farm real estate value increased year over year for all three state.  Idaho posted a 4.3% year-over-year increase in farmland value, while Washington reported a 2.5% increase, and Oregon posted 1.6% increase.

Nationally, cash rents also hit record high levels, rising 0.6 percent to $161 per acre.  Munch said these changes in value will have a mixed impact on American Ag.

“On the positive side, a continued increase in real estate values means that the primary asset many farmers own, which is land, has grown in value," Munch noted.  "That means it really strengthens the balance sheet and can improve access to credit. On the other side, that rate of growth has slowed, so that means the expansion of equity has also slowed.”

Click Here to check out the entire USDA report.

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com