Go west, young man—and when you get there, grow some corn.
The value of farmland in the northern plains states—Kansas, Nebraska, North and South Dakota—rose 16 percent in the past year, according to the Land Values report (pdf) published earlier this month by the National Agriculture Statistics Service (NASS). The average acre in the area is now worth $2,280, up from $1,960 in 2013.
The shift reflects the rising price of corn, which has gone up more than 50 percent from 2010 to 2013, likely encouraging farmers to predict an increase of prices through 2014 as well. In the past four years, wheat has appeared to level off in price. For farmers, planting corn is simply more lucrative, and NPR has noted that that weather conditions in the northern plains have changed to benefit production of corn. Meanwhile, the states are planting less wheat. In the Dakotas, production of wheat has dropped 22 percent since 2000.
As corn has become more valuable, the states within the Corn Belt display an increased farmland value as well. Another report published in the Proceedings of the National Academy of Sciences showed that even previous grasslands are being converted to corn at rates between 5 percent and 30 percent.
Using the interactive map below, you can look at the spread of corn production in the U.S. over time. There is a subtle but clear change in the acreage of corn production expanding beyond the Corn Belt and north.
This has been a good year for corn—favorable rains and mild temperatures—but a strong harvest is having adverse effects on prices, according to the Des Moines Register. In fact, the glut is causing corn prices to decrease this year. Some buyers are expecting this year’s surplus to be short-lived; others expect that lower crop prices may be around for several years. Either way, it will effect land values in years to come.
Corn can’t explain everything in the Land Values report, though. For instance, some of the most valuable cropland lies in northeastern states such as New Jersey and Delaware. Prices there are high and in general more stable: There is a greater variety of crops in the Northeast, making farmers less vulnerable to the price fluctuations of any one commodity, and farmland competes with urban areas for use, which drives prices up.
It’s clear that corn has made good short-term growth, but it’s crop diversity that creates stability for farmers. As interesting as these maps and trends are, next year’s pricing survey will reveal whether the northern plains’ bet on corn continues to pay off, or whether they’ll get trapped in a glut.