August 14, 2003

Study Shows Missouri Farm Land Values Up 5.3 Percent

Missouri farmland values increased 5.3 percent to $1,600 as of January 1, 2003 compared with $1,520 on January 1, 2002. Cropland values increased 6.8 percent to $1,570 per acre and pasture values increased 5.8 percent to $1,000 per acre.

Farm real estate values, a measurement of the value of all land and buildings on farms, averaged $1,270 per acre as of January 1, 2003, up 5.0 percent from the previous year. 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 pasture values, which rose by 4.2 and 5.1 percent, respectively, from January 1, 2002.

Cropland values averaged $1,720 per acre and pasture values averaged $618 per acre on

January 1, 2003, compared with $1,650 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 certainty of government commodity programs also lent support to some agricultural land. Also, potential for nonagricultural uses contributed to strong increases, especially for pasture values.

Income from crop and livestock commodities were 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 Lake region.

The highest farm real estate values were in the Northeast region, where urban influences drove the average value to $2,950 per acre. In the Appalachian and Southeast regions, where urban and recreational influences are increasing, farm real estate value's rose 7.1 percent to $2,420 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 $2,450 per acre, in the Corn Belt and 2.6 percent, to $738 per acre, in the Northern Plains. Together these regions account for about one-half of the U.S. total cropland acres.

The highest average cropland values, at $3,720 per acre, are in the Pacific region, where a significant portion of the cropland is irrigated.

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