August 11, 2005

Missouri Farm and Real Estate Values Jump Up 10 Percent

(Columbia, MO) - Missouri farm and real estate values, including all land and buildings, increased 10.1 percent to $1,740 per acre as of January 1, 2005, compared with $1,580 per acre on January 1, 2004.
Non-irrigated cropland values increased 12.1 percent to $1,850 per acre and irrigated cropland values increased 9.8 percent to $2,470 leading to an all cropland value of $1,890. Pasture value increased from the previous year’s mark of $1,130 to $1,260 per acre.
Non-irrigated cropland cash rent increased 3.9 percent to $79 per acre compared with $76 per acre last year. Pasture cash rent was rated at $27 per acre, a 3.8 percent increase from the previous year.
National farm real estate values, a measurement of the value of all land and buildings on farms, averaged $1,510 per acre on January 1, 2005, up 11.0 percent from 2004. This is the largest percentage increase since 1981, when farm real estate values rose 11.1 percent from the previous year.
The $150 per acre increase is the largest dollar increase on record. The previous record was 1980, when values climbed $109 per acre above the 1979 value.
Cropland and pasture values rose by 11.3 and 9.5 percent, respectively, from January 1, 2004. Cropland values averaged $1,970 per acre and pasture values averaged $694 per acre on January 1, 2005, compared with $1,770 and $634 per acre, respectively, a year earlier. The value of other land and buildings increased 11.9 percent.
The increase in farm real estate values was driven by a combination of factors, including low interest rates, high commodity production and prices, and strong demand for nonagricultural land uses. Nationally, survey data indicated that agricultural land with potential for immediate development (expected land use if sold) was valued at more than $6,050 per acre. The survey also indicated that agricultural land with potential for future development was valued at nearly $5,400 per acre, about $1,400 higher than the 2004 indication. Demand for farm real estate as an investment continued to be strong.
Regional increases in the average value of farm real estate ranged from 8.2 percent in the Delta and Southern Plains regions to 13.2 percent in the Northeast and Southeast Regions. The highest farm real estate values were in the Northeast region, where urban influences have pushed the average value to $4,020 per acre. In the Corn Belt region farm real estate values rose 10.9 percent, to $2,550 per acre. The Mountain region, with its expanse of pasture and rangeland, had the lowest farm real estate value, at $599 per acre.
Cropland values in the Southeast region, at $2,960, had the highest average increase in cropland value, up $500 per acre. In the Corn Belt region cropland values rose 12.2 percent, to $2,750 per acre and the Lake States increased 9.4 percent, to $2,220 per acre. Together, the Corn Belt and Lake States regions account for nearly one-third of the U.S. total cropland acres.
Pasture values in the Northeast and Appalachian regions had the highest average increase in pasture value, up $300 per acre. In the Northern Plains, Southern Plains, Mountain, and Pacific regions (17 western states) pasture values per acre respectively increased 16.5 percent, 11.4 percent, 14.6 percent, and 9.8 percent. Together, the 17 western states account for about 87 percent of the total pasture acres on farms in the 48 States.

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