U.S. farmland values scored another gain in 2002, rising for the 16th consecutive year, according to the USDA's National Agricultural Statistics Service's newly combined Agricultural Land Values and Cash Rents Report.
Farm real estate values, up 5.0 percent from 2001, are a measurement of the value of all land and buildings on farms across the country and averaged $1,270 per acre as of Jan. 1, 2003.
Increases were driven by a combination of factors including low interest rates, poor returns for alternative assets, certainty of government commodity programs, and potential for nonagricultural uses. Income generated from agricultural production provided 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 States. The highest farm real estate values emerged in the Northeast region, where urban influences drove the average up to $2,950 per acre.
In the Appalachian and Southeast regions, urban influences again factored in to boost values 7.1 percent to $2,420 per acre. Farm real estate values rose less significantly in the Mountain region to $526 per acre.
Cropland values rose 4.7 percent to $2,450 per acre in the Corn Belt and rose 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. Pasture values outpaced those of cropland in many States, mainly due to its greater appeal and availability for development and recreation.
Nationally, cash rents paid in 2003 increased 2 percent from 2002, advancing to $73 per acre. In the Corn Belt, cropland cash rents averaged $110 per acre and $48 per acre in the Northern Plains, 2 percent above the previous year. In the Southeast region, cropland cash rent fell 2 percent to $44 per acre. The Pacific region's rental rates remained unchanged at $180 per acre. Overall, cropland rental rates increased in 8 of the 10 regions.
Pasture cash rents dropped 2 percent, from $9.20 per acre in 2002 to $9.00 per acre in 2003.