As reported in the most recent issue of The Land Report, demand for agricultural land nationwide accelerated in 2021 after land prices remained flat for almost a decade. Citing the National Agricultural Statistics Service (NASS) Land Values 2021 Summary authored by the US Department of Agriculture (USDA), farm real estate values averaged $3,380 per acre for 2021, which is a 7% increase from 2020.
What’s driving the increase in values?
Texas A&M research economist with the Texas Real Estate Research Center, Charles Gilliland, tells The Land Report that this upward trend is due to the following reasons:
- Government programs enacted in response to the COVID-19 pandemic and the trade war with China that have benefited farmers and other landowners;
- Low interest rates and high commodity prices;
- And the migration of many city dwellers into more rural areas.
Values by State
Some Surprises in the Top Gains
While the magnitude of the increase varied across states and land types, the principal takeaway is that land prices were up across the board, and analysts see no indication that this trend will end anytime soon. The top 5 biggest gainers may surprise you:
- Massachusetts led the nation with a staggering 21.2% gain.
- Nebraska gained 11.1%.
- Kansas rose 10.5%.
- Oregon gained 10.3%.
- Vermont increased 9.9%.
What about the American West?
Mountain states saw a more modest gain than some other areas of the country, averaging a 3.2% increase in farm real estate values. The northern plains saw superior growth rising to 9.4% in average value per acre, while Pacific states were close behind with an average of 8.6% gain in farmland values.
About the NASS Land Values 2021 Summary
The report covered farm real estate (which includes all land and buildings on US farms), pasture, and cropland values across all 50 states and was tabulated in August 2021. Cropland values saw a 7.8% gain and pasture values recognized a 5.7% increase nationwide between 2020 and 2021.
Keep in mind, these are just farm values. Stay tuned for our upcoming state of the market for our assessment on cattle ranches, sporting properties, resort markets, conservation, and more.