Annually, a study is carried out to forecast the average cost of land for agriculture, as well as for real estate. The study describes the increments and how the cost fluctuates according to the zone of each state of the U.S. Bellow, we provide some data offered by the NASS (National Agricultural Statistics Service) regarding the value of the crops in the U.S. and its productivity.
Land for agriculture
According to the NASS, the value of croplands at the state level varied from $1,030 per acre in Montana to $12,900 per acre in the New Jersey area in 2018. Regarding croplands (irrigated and non-irrigated) in the United States, the average cost was $4,130 per acre in 2018, with an increase of 1.0 percent with respect to 2017. According to the NASS report, “from 2004 to 2018, cropland value increased 136 percent. For pasture, the average value at the state level ranged from $370 per acre in New Mexico to $12,500 per acre in New Jersey.
In nine other states, the cost of pasture remained the same between the years 2017 and 2018; while, in the remaining states, there was a variation in value, which led to a decline of 3.3 percent in Virginia, while it increased 8.6 percent in the Nebraska area.
Cost of renting the land
In 2018 the average rate to rent croplands in the United States was $2 higher than in 2017, reaching $138 per acre. For irrigated croplands, the average rate per acre was $215 and for non-irrigated croplands was $125. For pastures, the average rental rate didn’t experience significant changes remaining at $12.50 per acre.
Among the states, the rental cost per acre in 2018 varied from $32 in Montana to $340 in California in relation to agricultural lands. ” Rates ranged from $72 in Oklahoma to $528 in California for irrigated cropland; from $26.50 in Montana to $231 in Iowa for non-irrigated cropland; and from $6.30 in Montana to $54 in Iowa for pastureland.” according to the NASS report.
This year, agricultural land values increased significantly so the average national rate went from $136 per acre in 2017 to $138 in 2018, which in some way was the same rental rate registered in 2013. “While rates rose to a maximum of $144 per acre in 2015, land rental rates have been fairly static around this rate from $135 to $140 per acre over the past six years,” according to the Farm Bureau.
In the agricultural world it is usual to run into certain obstacles, however, it is worth mentioning that cash rental rates for cropland increased $2 per acre averaging $138 per acre, compared to other years when it was quite lower. Agricultural land is now an excellent alternative for those who wish to invest in buying or renting land to obtain commercial profits. Some of the forecasts indicate that the value of agricultural land in the United States will continue to grow as a result of the increase in average cash rental rates.