There is big news down on the farm today. It is one of the areas of the nation where the real estate market is looking up! This is not only good news for the land owners, but for many of the small enterprises supporting agriculture.
Rural entrepreneurs are often linked to farming and agriculture and unfortunately don’t get the same attention as their big-city counterparts in the world of small business. But today is different.
Farm prices are hitting new records. Not just the prices for corn and other products grown on the land, but the fields! Federal researchers say farmland prices are reaching new levels. Every year the United States Department of Agriculture or USDA examines farm prices across the nation. The latest numbers indicate while the housing and real estate market in cities is soft, the prices down on the farm are soaring!
Even the pastures are seeing an increase in the value according to USDA researchers. Farm real estate values, a measurement of the value of all land and buildings on farms, averaged $2,350 per acre on Jan. 1, 2008, up 8.8 percent from 2007. The $2,350 per acre is a record high and $190 more than a year earlier. Both cropland and pasture values for 2008 are record highs. Cropland values rose by 10 percent to $2,970 per acre, up from the previous high of $2,690 in 2007. Pasture value rose by 6 percent to $1,230 per acre.
Regional increases in the average value of farm real estate ranged from 1.6 percent in the Northeast region to 15.5 percent in the Northern Plains region. 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. The Northern Plains region had the lowest farm real estate value, at $1,110 per acre, up 15.5 percent from the previous year. In the Corn Belt region cropland values rose 14.8 percent, to $4,260 per acre. The Southern Plains region increased 12 percent from the previous year, to $1,490 per acre.
The Northern Plains region also had the highest average percentage increase in pasture value, 19.7 percent above 2007. In the Southern Plains and Mountain regions, which account for more than half of the pasture in the U.S., pasture values per acre increased 17.1 percent and 6.4 percent. For more details of the USDA report click here.
This increase in the value of rural real estate is not only good news for the farm owners, but the businesses supporting agriculture including farm equipment, feed stores, and building supply companies.