By Susan A. Baird
PBN Web Editor
ITHACA, N.Y. – “While commercial and residential development has slowed in many regions, farm real estate values continue to increase,” according to analysts with the National Agricultural Statistics Service, a division of the U.S. Department of Agriculture.
Farm real estate values nationwide – including all land and buildings – averaged a record $2,350 per acre on Jan. 1, the NASS said in its “Agricultural Land Values and Cash Rents Annual Summary.” That represented an increase of 8.8 percent, or $190 per acre, from the average value a year earlier.
Cropland and pasture values also surged to record highs, the report found. Croplands nationwide rose 10 percent to an average of $2,970 per acre. Pasture values rose 6 percent to $1,230 per acre, as losses in the Southeast partly offset gains in the Plains region and corn-producing states.
Among the 10 regions tracked by the USDA, price increases ranged from 1.6 percent in the Northeast to 15.5 percent in the Northern Plains region, the report found.
“The highest farm real estate values remained in the Northeast region, where development pressure continued to push the average value to $5,080 per acre.”
Massachusetts had the highest overall price, at $12,200 per acre, a 3.4-percent increase from 2007. Rhode Island was close behind, with an average farm price of $12,000 per acre, down 4.0 percent from a year ago. Connecticut was No. 3 with an average price of $11,500 per acre, a 1.7-percent decline.
Fourth through sixth were three other Northeastern states: New Jersey ($11,300), Delaware ($9,900) and Maryland ($9,100).
Farm real estate values in the rest of New England, however, were lower. Prices averaged $3,900 per acre in New Hampshire, $2,850 in Vermont and $2,100 in Maine, the USDA found.
The agency did not give state-by-state values for cropland and pasture land within the six-state area. Instead, it gave average values for the New England area. The average value of cropland in New England this year was $7,410, or 2.1 percent higher than in 2007; the average value of New England pasture land was $6,490, or 1.7 percent higher than last year.
“It creates a better balance sheet, that’s for sure,” Bruce Babcock, director of the Center for Agricultural and Rural Development at Iowa State University in Ames, told Bloomberg News. He said the higher values will encourage farmers to buy fertilizer and seeds or invest in new trucks and tractors.
But Bob Young, chief economist with the American Farm Bureau Federation, the nation’s largest trade group for farmers, expressed concern that the higher real estate values may lead some growers to take on too much debt.
“Some of them may be like anybody else: There’s a ‘wealth illusion’ that goes with high prices that may make them more open to spending,” Young told Bloomberg in a telephone interview. “Many are still worried about it being an illusion, though.”
The U.S. Department of Agriculture’s National Agricultural Statistics Service is responsible for conducting monthly and annual surveys for the USDA, and preparing official estimates of commodities production, supply and prices. The NASS, based at Cornell University’s Albert R. Mann Library, also conducts the nation’s twice-per-decade census of agriculture. For additional information from the USDA and the NASS – including the 2008 “Agricultural Land Values and Cash Rents Annual Summary” – visit usda.gov.
