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The Land Values 2021 Summary report, released last Friday by USDA’s National Agricultural Statistics Service, shows agricultural land values increasing at a rate not seen in nearly a decade. This report and its contents provide one of many indicators of the overall health of the agricultural economy and help paint a picture of costs that farmers face as they negotiate rent levels for the near future.

Farm Real Estate Value

The U.S. average farm real estate value, a measurement that includes the value of all land and buildings on farms, clocked in at a record $3,380/acre. This 7% increase over last year represents a percentage change not seen since 2014 when values increased 8% over the previous year. In looking at the dollar value of the change, this is a $220/acre increase over 2020, a level not seen since 2012. These levels vary significantly throughout the country, with the highest real estate values concentrated in areas of the country with larger volumes of high-value crops (think wine grapes and tree nuts in California), as well as areas experiencing upward pressure due to proximity to urban areas. Much of the Midwest experiences higher levels of real estate values, followed by the South and Pacific Northwest, and finally the Plains and Mountain states. On a state-by-state basis, (excluding Northeast states with urban pressure), Nebraska, Kansas and Oregon all posted double-digit percentage changes over last year. These were followed by Texas, Iowa, California and South Dakota, each posting over 9% year-over-year growth.