U.S. farmland values rose 11 percent to a record this year as crop and livestock prices surged and export demand remained high, the Department of Agriculture said.
The average value of all land and buildings on farms and ranches in the 48 continental states was $2,650 an acre, according to a June survey of farmers, the USDA said today in an annual report, up from a revised $2,390 a year earlier. The sample was taken before the worst drought since the 1950s spread through the Corn Belt and Great Plains, which may make investors shy away in the short term, said Brent Gloy, an agricultural economist at Purdue University in Indiana.
From an economic viewpoint, “one year shouldn’t have a big impact,” Gloy said in a telephone interview before the report. “From a psychological impact, people won’t be as aggressive buying land in places that didn’t have a crop.”
Farm income may reach $91.7 billion this year, second only to 2011, according to a USDA forecast made before the drought. Corn traded in Chicago has soared 60 percent since June 15, while soybeans climbed 24 percent and cattle gained 6.6 percent. The USDA’s next profit forecast will be at the end of this month.
The most expensive farmland in the U.S. was in New Jersey at $12,200 an acre, followed by Rhode Island at $12,000, according to the USDA. The cheapest land was in New Mexico and Wyoming, each at $560 an acre. The Corn Belt was the most expensive of the 10 regions tracked by the USDA, averaging $5,560 an acre after gaining 18 percent from the previous year, surpassing the Northeast, the most expensive area in 2011. The Mountain region was cheapest at $974 per acre.
Prices rose across the Corn Belt, the heart of this year’s drought, with values in Iowa, the largest corn, soybean and ethanol producer, rising 23 percent to $7,000 an acre. The biggest jump among regions -- 27 percent -- was in the Northern Plains, where Nebraska had a 34 percent jump, tops in the nation.
The Southeast was the only region where prices fell, 4.1 percent to $3,310 an acre. South Carolina had the biggest drop, at 7.9 percent to $3,500 an acre.
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