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📈 Farmland values at record highs

📈 Farmland values at record highs

What's farmland valued at and what is being planted on all those acres?

Clint Fischer
February 08, 2023

Weekly Edition #9

Good Morning. Welcome to the Gravel Road → your weekly agri-news update. Where we regularly blow your mind with ag info-tainment like an F-22 firing an AIM-9X Sidewinder missile at a 60,000 foot high Chinese Spy Balloon.

Here's what we have this week:

📈 Farmland Values
👍 Sweet Seeds
🌽 Top 10 Crops

Farmland Values

Prices aren't high enough if you're a seller. Prices are too high if you're a buyer. Investor money is driving the prices up. Foreign countries shouldn't be buying US farmland. Pro athletes are making farmland cool.

Whatever your interest is, there's a common theme: people are talking about farmland values.

As interest rates continue to rise in an attempt to combat out-of-control inflation, more attention is being shown to farmland as a safe, steady return for institutional investors. Large REITs are getting in on the action, seeing farmland as a hedge against inflation.

So what does all this talk and attention to farmland ownership do?

It causes prices to rise. In some regions, more than doubling in the past two years. Last August, the USDA released their annual land values summary. You don't want to wade through 22 pages of data, so here's our summary of the summary:

Cropland

Average value (US) increased from $2,760/acre in 2008 to $5,050/acre in 2022 (83%⬆️)
2022 highest valued states: NJ ($15,900) CA ($15,400) IA ($9,300) DE ($9,200) IL ($8,950)
2022 highest % change over 2021: KS (24%) NE (21%) IA (19%) SD (18%) MN (17%)

Pasture

Average value (US) increased from $1,090/acre in 2008 to $1,650/acre in 2022 (51%⬆️)
2022 highest valued states: NJ ($14,400) FL ($5,900) NC ($5,200) TN ($4,450) GA ($4,400)
2022 highest % change over 2021: KS (23%) ID (15%) SD (16%) WI (15%) NE (14%)

These record high prices put an exceptional strain on young farmers and ranchers trying to break into the profession. High land values was listed as the top challenge for beginning farmers in a 2022 survey.

Young producers facing record high land prices can consider alternative options to purchasing land such as leasing, renting, or starting a farm business on someone else's property. They can also explore government programs for new and beginning farmers, pursue alternative financing options, and consider partnerships or co-ops.

One thing is for certain, producers of any age will need to focus on efficient and innovative farming practices to maximize their resources and profits. Additionally, looking into the viability of starting a farming operation on smaller plots of land or specializing in high-value crops may be the future.

SEEDS

🍅 Troubled Tomatoes: Kentucky indoor farming operation AppHarvest had a rough third quarter due to crop health issues. The start-up is switching tomato varieties and diversifying into berries, salad greens, and cucumbers to try and bring it out of the red.
🤘 Horns: Ever miss a calf at dehorning and end up with an extra set of horns in your herd? Well, this article outlining dehorning an adult cow is just for you.
💦 AI Spray: Farmer's Business Network (FBN), the do-it-all ag services giant is partnering with an Israeli artificial intelligence company to bring Greeneye technology (AI powered precision spraying) to its customer base.
🥩 Expensive Beef: Visitors to the 106th anniversary of the legendary Fort Worth Stock Show and Rodeo witnessed a record being broken. 'Snoop Dog', Sadie Wampler's Grand Champion Steer sold for $440,000, ousting the previous record holder of $310K.
🚜 Lazy Tractors: Farmers in Europe who want their Kubota tractors to have auto-steer are in luck. Not to be outdone, farmers in North America who want their Kubota tractors to be autonomous, are also in luck.

"I think having land and not ruining it is the most beautiful art that anybody could ever want to own."

-Andy Warhol

THIS WEEK'S TOP 10: US Crops

The USDA estimated that in 2019, there were approximately 922 million acres of farmland in the United States. (There's 2.3 billion total acres in the US) This includes cropland, pastureland, and other lands used for agriculture. However, not all of these acres are farmed each year as some may be left fallow or used for other purposes. These numbers can vary from year to year due to various factors such as weather conditions, market demand, and farming practices.