Why it's getting harder to farm in the West
Price of Farmland Continues Climb in Nation, Mountain West
By Courtney Lowery, 8-08-08
 |
|
 | |
| The above map shows farm real estate prices as of Jan. 1, 2008 and the percent change since 2004. NewWest.Net graphic, NASS data. Click on the image for a PDF of the report with more maps and graphs. | |
|
Even as commercial and residential development pressures on farmland wane, the price of farm real estate across the nation is breaking records and prices in the Mountain West are leading the way.
According to a report released this week from the USDA’s National Agricultural Statistics Service, “strong commodity prices and farm programs, outside investments, favorable interest rates, and tax incentives” are the big contributing factors to the increase in farm real estate, and “Livestock prices, recreational use and urban development” continue to drive up the cost of pasture land.
Nationwide, farm real estate values, which measure all land and buildings on farms, grew to an average of $2,350 per acre, a jump of 8.8 percent from January 2007 to January 2008. The average is $190 more than it was in 2007 and a record high.
The average price of cropland grew 10 percent to $2,970 per acre and pasture land grew 6 percent to $1,230 per acre.
In the last five years, the interior West, including Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming has had the biggest increase in farm land real estate values with a jump of 120 percent since 2004. Of the eight states in the region, Montana has seen the biggest increase since 2004—168.3 percent—and Utah was next with a 139 percent increase.
From 2007 to 2008, the highest average per-acre real estate values were still in the Northeast region, but the highest increase was in the Northern Plains. There, farm land grew 15.5 percent from 2007 to 2008 to $1,100 per acre. (The Northern Plains still boast the cheapest per-acre values, however.) Pasture land in the Northern Plains rose 19.7 percent.
In the Mountain West from 2007 to 2008, Wyoming farm real estate had the biggest increase, of 19.6 percent, but to a relatively low $670. Montana was next in line with a 14.5 percent increase to $1,100.
The only decreases in the nation between 2007 and 2008 were on the eastern seaboard, where averages are still $9,000 per acre and higher. The biggest drop was in Delaware, where real estate dropped 4.8 percent to $9,900 an acre. The next in line was Rhode Island where prices dropped 4 percent to $12,000 an acre.
The price of farmland isn’t the only barrier to entering, or continuing farming either. Don’t forget the fuel. Another report released by the National Agricultural Statistics Service this week shows farm production expenditures are breaking records as well. In 2007, expenditures rose to $290 billion, a 9.3 percent increase from the year before and a 30 percent increase from five years ago.
Per farm, costs rose 10 percent from 2006 to $125,648 in 2007—most of that increase coming from fuel, fertilizer and other chemicals, lime, soil, and feed costs.
For the expenditure report, click here.
For the full farmland values report, click here (opens PDF).
Like this story? Get more! Sign up for our free newsletters.
Comments
What if I had a farm that was half in Montana, half in Idaho and half in WhyOhMean? Should I buy or should I sell?
Bestest wishes,
Tabby
First off, great name. Secondly, I don\'t want to take anymore math. Are you aware of anything else that may help - like horticulture, cooking or even better, Drunken American Literature. I would take that class everyday.
Bestest wishes,
Tabby