The U.S. economy continues to show signs of progress on several fronts. That includes, for yet another year, strong growth in farm real estate value. Consider this evidence from the 2023 Summary of Land Values from the U.S. Department of Agriculture, which reveals:
- Farm Real Estate Value, defined as a measurement of the value of all land and buildings on farms, averaged $4,080 per acre for 2023. That’s up $280 per acre from 2022, a strong 7.4% increase.
- Cropland Value, land used to grow field crops, averaged $5,460 per acre. That increase of $410 per acre over 2022 represents 8.1% growth over 2022.
- Pasture Land Value, that which is grazed by livestock, averaged $1,760 per acre. The $110 per acre increase works out to a 6.7% from last year.
It’s worth noting: Strong as the 2023 numbers are, they don’t match the historic growth of 2022. Thanks to increased real estate demand during the pandemic, that year saw double-digit growth over 2021 in Farm Real Estate Value (12.4%), Cropland Value (14.3%) and Pasture Value (11.5%). Even so, the 2023 numbers represent another healthy advance.
Closer to home in the Mountain Region, the states where Mirr Ranch Group mainly brokers ranch properties, land values also continued to advance. Overall, the region saw growth of 4.3% in Farm Real Estate Value, 3.9% in Cropland Value and 3.2% in Pasture Land. While most states in the region experienced growth in Farm Real Estate Value between 3-4%, we were heartened to see that our home state of Colorado soared 10.2% over 2022.
At Mirr Ranch Group, our experience in 2023 was that demand for Class A “amenitized” ranches with all the bells and whistles still outstripped the supply. On the other hand, the supply of $2-to-5 million recreational property listings is increasing, and there are quite a few price reductions that follow the trend for the second-home resort market.
FILLING BASIN: The Bureau of Reclamation has announced the water crisis in the Lower Colorado Basin has been staved off for the next few years. The Bureau credits wet conditions in 2023 and water cuts of a combined 3 million acre-feet planned by Arizona, California and Nevada as important first steps in
briefly averting the crisis. But the Bureau also reminds that the long-term outlook remains cloudy, as the “Colorado River Basin’s … two largest storage reservoirs, Lake Powell and Lake Mead, remain at historically low levels.” Read more in the Colorado Sun.
MILDFIRES: The news has been heartbreaking in Canada and Maui in the wake of devastating wildfires. And through September, wildfires have ravaged 2.4 million acres in the U.S. But thanks to wetter conditions across the country, that’s nearly 4.5 million fewer than in 2022 and just 40% of the 10-year average, according to federal officials. Read the Mountain West News Bureau story.
MUSSEL WORK: Few invasive species are as destructive as Zebra and quagga mussels. The tiny mollusks, which experts think arrived from Eurasia in the Great Lakes in the 1980s via discharged ballast water, have an outsized negative impact. They’ve invaded rivers in the eastern Mississippi drainage as well as in Texas, Utah, Nevada and California. A few cases have popped up in Colorado, including recently in Highline Lake State Park near Grand Junction. See how Colorado Parks and Wildlife officials are attacking the problem.
Ken Mirr is the Founder and Managing Broker of Mirr Ranch Group. Have a question about the West or investing in a ranch? Email him at Ken@MirrRanchGroup.com.