Ag Land Values and Cash Rent on the Rise
August 8, 2023
In 2023, land values and cash rent are on the rise, according to updated data released by USDA National Agricultural Statistics Service (NASS).
In addition to the Cash Rents survey, USDA released its annual Agricultural Land Values report, which includes state and region average value per acre for farm real estate, irrigated and non-irrigated cropland and pastureland. Both reports revealed higher cash rents and land values across the United States.
CASH RENTS BY STATE
Nationally, farmers paid an average cash rent of $237 per acre for irrigated cropland in 2023, up from $227 in 2022, according to the cash rent database released by USDA NASS. The highest cash rent cost per acre for irrigated cropland is in California, averaging $486 per acre, followed by Hawaii at $452 and Washington at $440 per acre.
NASS conducts the county-level Cash Rents survey every year in all states except Alaska. U.S. and state estimates are released in August every year. All qualifying counties in these states are represented in the sample.
Following top 3 rent states California, Hawaii, and Washington, the average cash rent for irrigated cropland per acre in Arizona is nearly $100 less than Hawaii at $347 per acre, in fourth place. Fifth place is Massachusetts at $301 and Indiana is sixth place at $293. Slated as the seventh most expensive average cash rent price is Nebraska at $277 per acre for irrigated cropland, followed by Illinois at $276, Iowa at $271 and Wisconsin at $268.
Looking at cash rent averages for irrigated cropland in other Corn Belt states: Michigan ($259), Ohio ($225), Kentucky ($220), Minnesota ($215), Missouri ($209), and Kansas ($154).
Among the lowest cash rents per acre for irrigated cropland reported in the NASS database are Wyoming at $86.50, Montana at $98 per acre, Oklahoma at $99.50, Texas at $113, Utah at $114 and Virginia, South Carolina, and Louisiana at $122 per acre.
Five states -- Connecticut, Maine, New Hampshire, Vermont and West Virginia -- did not report an average cash rent per acre for irrigated cropland. Those states were also unreported in 2022.
"West Virginia did not get enough reports to set an estimate. The other four, we have strict publication criteria. If the report does not meet our publication criteria, we confide it at the state level. For example, if there is a case of infrequent reports, or single digit reports, that isn't sufficient in protecting producers' privacy," said Jodi Holverson, public affairs specialist for USDA NASS, in an interview with DTN.
AGRICULTURAL LAND VALUES
Land values for farms in the United States rose in 2022, according to the Agricultural Land Values report released June 4.
"This 7.4% increase over last year is less than the 12% bump between 2021 and 2022, which was the largest change since 2006, when values increased 14% over 2005. Excluding last year, 2023 farm real estate values had the largest percentage increase since 2014. Looking at the dollar value of the change, the $280 per acre increase over 2022 is the second-highest increase since the USDA began the survey in 1997," stated American Farm Bureau Foundation Market Intel economist Daniel Much in a report released Monday.
Estimates are based on the June Area Survey that uses approximately 11,000 one square mile segments of land. Land is grouped by these economic regionsS: Northeast, Lake States, Corn Belt, Northern Plains, Appalachian, Southeast, Delta States, Southern Plains, Mountain and Pacific.
Enumerators collecting data for the June Area Survey contact all agricultural producers operating land within the boundaries of the sampled land segments and record land value information for cropland and pasture within these segments. They also collect an estimated value of all land and buildings for the operator's entire farming operation and the estimated percent change from the previous year.
--The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $4,080 per acre for 2023, up $280 per acre (7.4%) from 2022.
--The United States cropland value averaged $5,460 per acre, an increase of $410 per acre (8.1%) from the previous year.
--The United States pasture value averaged $1,760 per acre, an increase of $110 per acre (6.7%) from 2022.
Farm Real Estate Value Per Acre By Region:
--The Northeast region -- Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont -- reported an average farm real estate value per acre of $6,740, up 3.9% from 2022. Among this grouping, Rhode Island reported the highest farm real estate value per acre at $18,300, up 4.6% from the year prior.
--2023 Farm Real Estate Value by State saw an increase in each state, with the highest change in values from California, Iowa, Illinois, Indiana, Ohio, Rhode Island and Pennsylvania.
--The Lake States of Michigan, Minnesota and Wisconsin reported an average farm real estate value of $6,450 per acre, a change of 8.2% from 2022. Minnesota reported the highest value of the group, at $6,600 per acre, up 7.3% from the year before.
-- Illinois, Indiana, Iowa, Missouri and Ohio as the Corn Belt states listed in the Land Report reported an average farm real estate value of $8,100 per acre, up 7.1% from 2022.
--Northern Plains states, including Kansas, Nebraska, North and South Dakota, reported an average farm real estate value of $3,160 per acre, up from 13.7% from 2022.
--Kentucky, North Carolina, Tennessee, Virginia and West Virginia in the Appalachian economic region reported an average farm real estate value of $4,980 per acre, up 7.8% from 2022.
--Southeast states, including Alabama, Florida, Georgia and South Carolina, reported an average farm real estate value of $4,840 per acre, up 5.7% from the year prior.
--Arkansas, Louisiana and Mississippi in the Delta economic region reported an average of $3,400 farm real estate value per acre, up only 1.8% from 2022.
--Oklahoma and Texas in the Southern Plains region reported an average of $2,800 farm real estate value per acre, up 9.4% from 2022.
--The Mountain region -- Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming -- reported the lowest farm real estate value per acre at $1,450, up 4.3% from 2022.
--The Pacific region, the states of California, Oregon and Washington, reported an average of $7,270 per acre of farm real estate value.