News

Increase in cropland values

By Scott Wagar

08/20/2013

North Dakota, in 2013, has seen the greatest jump in the nation when it comes to the average per acre price for cropland, which includes Bottineau County that saw more than a 40 percent increase in its cropland value average.

The National Agricultural Statistics Service (NASS), a branch of the United States Department of Agricultural, has published its 2013 land value summary with results that shows North Dakota ranks number one in the nation for the largest average per acre price increase for cropland, coming in at $1,910, which is 41.5 percent increase from 2012.

According to NASS, the average per acre price of cropland nationwide increased by 13 percent from last year.

If the increase in cropland value in the nation is at 13 percent, why is the value so high in the state of North Dakota in a one year period? Andrew Swenson, farm and family resource management specialist of the North Dakota State University Extension Service, has stated that the increase comes from two major reasons in the state, but added he expects the value to decrease next year.

“The question going forward is whether this huge increase has capped a 10 year run-up in land values which has been the largest in the past 100 years, even exceeding that which occurred from 1973 to 1981. North Dakota cropland is now the highest ever, even when adjusting for inflation,” Swanson said.

“The reasons for the sharp increase have been several years of strong crop profit fueled by historically high crop prices at the same time we have had very low interest rates. “These have increased the financial means of producers to bid on land.  However, it looks like the run-up in land prices has come to a halt. I expect they will have dropped in next year’s survey because of lower crop prices and higher interest rates.”

BOTTINEAU COUNTY

In Bottineau County, the average per acre price for cropland in 2013 came in at $1,547, which is an increase of 41.9 percent from 2012 where the average value was $1,090 for cropland.

When it came to the average value of pasture land per acre in the county the average value was $659, when compared to 2012 it was $438, a difference of $221, or a 50.4 percent increase.

The average value of pasture land per acre in the state of North Dakota for 2012 was $438, in 2013 the pastureland value came in at $659, which increased by 50.4 percent or $221.

FARM REAL ESTATE VALUE
 
The NASS-USDA also stated in its summery that when it came to 2013 Farm Real Estate Value, the average in North Dakota was also the highest in the nation at $1,690 per acre, an increase by 36.3 percent.