Value of farmland going up

BY AMY DOMINELLO
Media General News Service

Published: August 6, 2008

WASHINGTON - Despite a slowdown in commercial and residential construction in many areas of the country, the value of farmland is increasing.

The Department of Agriculture reports that farm real estate values nationally increased 9 percent last year. That brings the average value to $2,350 per acre.

Farmland throughout the Southeast rose in value, with farmland in Alabama jumping 13 percent, the 9th highest increase in the nation.

The value of South Carolina farmland increased 5 percent. North Carolina and Virginia farmland both rose 4 percent, while Florida and Georgia saw little to no change.

“If you own the land, that’s a good thing,” said Bob Young, the chief economist for the American Farm Bureau. “If you’re trying to buy land, that’s a challenge.”

The record levels, according to the report, are due to high commodity prices, land and farm investment, favorable interest rates and tax incentives that make it easier for farmers to sell and then purchase new land.

The annual report, released Monday, was based on a review in early June of land owned by 41,000 farmers around the country, said Scott Shimmin, the agriculture statistician who wrote the report. 

The survey helps farmers, the states, federal government and lenders get a sense of what farmland is worth throughout the country, he said.

Farmland used for crops is valued higher than that used as pastureland, the report said. Across the country, the value of cropland rose by 10 percent over the last year while the value of pastureland rose 6 percent, the report said. 

Nationally, rents paid to landlords for cropland rose 13 percent, or $11, to $96 per acre, according to the report. Pasture rents increased 8 percent, or $1, to $13 per acre.

Shimmin said strong commodity prices are driving up the prices for cropland.

The farm bureau’s Young said other reports have shown that farmers are not accruing much debt and that leaves them in a good financial position to buy land.

In coming years, Young said, several factors may influence farmland values. The push of suburban development into rural areas may slow as high gas prices encourage people to live in more urban areas, he said. On the other hand, he said, baby boomers looking to retire to rural areas could drive up the value of agricultural land.

Contact Amy Dominello at 202-662-7671 or

Read the report online: http://usda.mannlib.cornell.edu/usda/current/AgriLandVa/AgriLandVa-08-04-2008.pdf