Agricultural Economics Newsletter Missouri Farm Land ... - AgEBB

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Missouri Farm Land Values Opinion Survey—2013 Ron Plain and Joyce White

Agricultural Economics Newsletter FM 2013-1 August 28, 2013

Ron Plain Extension Economist

220 Mumford Hall University of Missouri Columbia, MO 65211 phone: 573-882-6533 FAX: 573-884-6572 e-mail: [email protected] website: agebb.missouri.edu/mgt/landsurv

University of Missouri, Lincoln University, U.S. Department of Agriculture & Local Extension Councils Cooperating Equal opportunity/ADA institutions

A survey was conducted in July 2013 to determine what people think has been happening to farmland values in Missouri. In Missouri, land sales prices need not be reported to any governmental or public agency. We hope the opinions expressed by our survey respondents will be helpful to others needing to estimate current farmland values and trends. Of the 207 persons responding in 2013, 69% were lenders, 12% rural appraisers, 6% extension specialists, 5% broker/realtors, and 8% were in other occupations. They provided their opinions to questions concerning current farmland values and trends. They were asked to exclude from their answers tracts smaller than 40 acres or land being converted to development or commercial uses. Average Value of Land Respondents were asked to give their estimates of land values as of July 2013 for three classes of cropland and pasture (good, average, poor), timberland (with valuable trees), and hunting/recreation land (land with little productive ag. value but with desirable aesthetic qualities). Classification of land was left to the judgment of each respondent. Their responses are summarized on Maps 1, 2 and 3 on the following pages. This year’s respondents reported the value of good cropland was up in 18 of the 20 areas of the state for a statewide average of $4,510/ac., 17% above last year. Regionally, the biggest jumps were a 48% increase in the northwest corner of the state to $7,205/ac. and a 51% increase in the southeast corner to $7,753/ac. The statewide average value for good pasture land was up 12% at $2,492/ ac. Timber and hunting/recreation land were up about 10% at $1,817/ ac., and $1,724/ac., respectively.

Who Is Buying Land? Survey respondents thought 69% of farmland buyers planned to farm the land themselves (Map 4). This is a one point increase over 2012. The number planning to rent out remained steady at 22% and the number planning to use the land for non-farming purposes declined one point to 9%. Factors Affecting Values Factors cited by many respondents as supporting farm land prices were similar to last year - low interest rates, low returns from other types of investments, crop insurance, high grain and livestock prices (profits). Changes in any of these factors could affect land prices negatively. Respondents from areas with very productive cropland reported continued demand for large tracts of good cropland but few sellers. They saw local farmers in a strong cash position with the technology and confidence to farm more land and other investors who anticipated a good return from crop share or cash rent. In south central areas with very little cropland the respondents saw less increase in land values. Operating margins were thin and few local residents could afford to buy more land. In a few locations over the state, respondents reported an impact from groups of individuals who wanted to own land near one another. Also, some saw a few land purchases by people who were fearful of new government policies and thought land was a more secure investment than U.S. currency. Outlook (Map 6) Over the next 12 months, respondents expect the rate of increase in cropland values to slow to 2.6%, while pasture values increase about 1.3% and non-crop/non-pasture values increase 0.8%.

Map 1. Estimated cropland values per acre for July 2013

Andrew Buchanan

Harrison

Mercer

Gentry

Grundy

DeKalb

5064 3366 2449

Clinton

Daviess Caldwell

Platte

Linn

Livingston

5287 3883 2509

Jackson

4217 3324 2535

Sullivan

6155 4245 2931

Lafayette

Cooper

Johnson

Vernon

St Clair

3051 2607 2238

Barton Jasper

Camden

Cedar Dade

2726 2263 1883

Greene Christian

Stone

Barry

2550 2200 1815

McDonald

Good cropland Average cropland Poor cropland

Jefferson

St Francois Madison

Iron Reynolds

n/a

2333 1839 1667

Oregon

4700 3425 2325

Ste Genevieve

Washington

Howell

Ozark

Taney

Franklin Crawford

Dent Shannon

2040 1714 1444

Map legend, region averages:

5023 St Charles 3867 2850

Warren

2400 1896 1649

Texas

Wright

Douglas

Lincoln

Maries

Dallas Laclede

Webster

Audrain

Osage

Pulaski

Polk

Pike

Monroe

3779 2987 2242

Miller

Hickory

Lawrence

Newton

Benton Morgan

3008 2498 1991

Ralls

Callaway

Moniteau Cole

$4510 $3395 $2495

Marion

5550 4199 3039

Boone

Saline Pettis

Henry

Lewis

Randolph Howard

Missouri Average Good cropland Average cropland Poor cropland

5730 3858 2724 Shelby

5881 4139 3071

Cass

Bates

Clark

Scotland

Adair Knox

Macon

Chariton

Carroll

Ray

Clay

Schuyler

Putnam

Montgomery

7205 5532 3679

Worth

Gasconade

Holt

Nodaway

Phelps

Atchison

Perry

Bollinger

Wayne Carter Ripley

Cape Girardeau Scott

Stoddard

Butler

7753 5964 3954

Dunklin

Mississippi New Madrid

Pemiscot

Map 2. Estimated pastureland values per acre for July 2013 3712 2864 2322 Andrew Buchanan Platte

Worth

Harrison

Mercer

Gentry

Grundy

DeKalb

2674 2147 1720

Clinton

Daviess Caldwell

Jackson

2946 2427 2036

2235 1895 1534

Sullivan Livingston

Linn

Schuyler

2800 2253 1784

Lafayette

Saline Pettis

Vernon

2096 1823 1549 Barton Jasper Newton

St Clair Cedar

Boone Cooper

Dade

McDonald

Camden

Polk

2064 1713 1428

Lawrence Barry

Miller

Hickory

Maries Phelps

Texas

Greene Christian Taney

Audrain

Osage

2487 2076 1599 Pulaski

Webster

Pike

Callaway

Dallas Laclede

Douglas

Ozark

1634 1372 1151

Lincoln

Franklin Crawford

Dent Shannon

Howell Oregon

Map legend, region averages: Good pastureland Average pastureland Poor pastureland

2744St Charles 2416 1978

Warren

1712 1431 1154

Wright

Stone

1996 1671 1350

Ralls

2621 2134 1708

Moniteau Cole

2032 1719 1447

Marion

Monroe

Howard

Benton Morgan

Missouri Average Good pastureland $2492 Average pastureland $2041 Poor pastureland $1646

Lewis

Randolph

Johnson Bates

2528 2039 1725 Shelby

2951 2268 1774

Cass Henry

Clark

Scotland

Adair Knox

Macon

Chariton

Carroll

Ray

Clay

Putnam

Montgomery

Holt

Nodaway

Gasconade

Atchison

Jefferson

Iron Reynolds

1582 1396 1180

St Francois Madison

n/a Wayne Carter Ripley

2858 2325 1683

Ste Genevieve

Washington

Butler

Perry

Bollinger

Cape Girardeau Scott

Stoddard

3219 2379 1793

Dunklin

Pemiscot

Mississippi New Madrid

Map 3. Estimated timber and hunting/recreation land values per acre for July 2013 Worth

2715 2412

Gentry

Andrew Buchanan Platte

Harrison

2230 2168

DeKalb

Sullivan

2055 1943

Lafayette

Randolph

1754 1661

Cooper

Johnson

Vernon

1635 1615 Barton Jasper Newton

Benton Morgan Miller

1605 1453 St Clair Cedar

Callaway Osage

1613 1565

Maries

Camden

Hickory

Polk

Pulaski

Phelps

Texas

1595 1417 Lawrence

Webster

1271 1088

Stone

1525 1373

Taney

St Charles

Warren

Ste Genevieve

Washington

Iron Reynolds

Oregon

Ozark

Timber land Hunting/recreation land

Jefferson

1277 1073

Howell

Map legend, region averages:

2147 2141

Franklin Crawford

Dent Shannon

Wright

Greene Christian Douglas

Lincoln

1135 1095

Dallas Laclede

Dade

Barry McDonald

Moniteau Cole

Henry

Pike Audrain

Boone

Cass

Bates

Ralls Monroe

Saline Pettis

Marion

2035 1921

Howard

Missouri Average Timber land $1817 Hunting/recreation land $1724

Lewis Shelby

Chariton

1828 1837

2033 1897

Adair Knox

Macon

Carroll

Ray

Clay

1687 1808

Livingston Linn

Daviess Caldwell

Clinton

Jackson

Grundy

Clark

Schuyler Scotland

Putnam

Mercer

Montgomery

Holt

Nodaway

Gasconade

Atchison

St Francois Madison

Perry

n/a

Bollinger

Wayne Carter Ripley

Butler

2017 1767 Cape Girardeau Scott

Stoddard

1795 1922

Dunklin

Mississippi New Madrid

Pemiscot

Map 4. Use to be made of farmland purchased in 2013 70% 23% 7%

66% 24% 10%

57% 37% 6% 72% 24% 4%

72% 21% 7%

Values estimated in this survey exclude tracts smaller than 40 acres or farmland being priced on its development potential.

69% 22% 9%

83% 12% 5%

78% 13% 9% 92% 5% 3%

Agricultural Land Values Per Acre June 2013 (USDA/NASS) Missouri Kansas Arkansas Iowa Illinois Cornbelt (IN, IL, IA, MO, OH) U.S. (average 48 states)

Cropland

Pasture

$3,800 2,100 2,560 8,600 7,900 6,980 4,000

$1,950 1,250 2,400 3,400 3,700 2,490 1,200

All land & bldgs. $3,100 1,900 3,000 8,400 7,800 6,400 2,900

66% 26% 8%

Missouri Average Operate farm themselves 69% Rent it out 22% Not use for ag production 9%

70% 24% 6% 63% 29% 8%

52% 31% 17%

68% 16% 16%

Map legend, region averages: Operate farm themselves Rent it out Not use for ag production 77% 15% 8%

72% 13% 15% 74% 14% 12%

62% 11% 27%

n/a 60% 37% 3%

Map 5. Percent change in estimated Missouri farmland values between July 2012 and July 2013 +47.7% +28.1% +37.3%

+6.2% +9.0% +17.9%

+17.8% +19.4% +6.1%

+14.9% +10.0% +7.8%

+12.9% +15.4% +6.0%

+27.9% +9.3% +0.6%

+25.0% +20.1% +30.8%

+19.2% +8.5% +0.4%

+17.9% +7.3% +8.7%

+5.9% +5.3% +3.1%

Missouri Average Change Good cropland +17.2% Good pastureland +11.9% Non-crop/non-pasture +10.3%

+24.4% +30.1% +20.6% +6.2% +5.7% -1.1% -2.0% +5.3% -4.5%

Map legend, region averages: Good cropland +12.9% +11.5% Good pastureland +3.8% Non-crop/non-pasture +19.3% -0.4% -9.0%

+5.9% +5.1% +6.4%

+10.6% +2.9% +36.8% n/a

+37.2% -17.7% -1.8%

+51.4% +28.8% +5.5%

Map 6. Forecasted percent change in Missouri farmland values between July 2013 and July 2014 -1.0% -0.6% +1.3%

+1.5% +1.1% +1.2%

+2.9% +1.9% +0.5%

+5.8% +1.9% +1.6%

+5.7% +3.7% +2.5% +6.0% +6.2% +4.7%

All Farmland & Buildings, 1950-2013 Missouri Values, USDA/NASS

Actual

+2.0% -1.8% -1.1%

Missouri Average Change Cropland + 2.6% Pastureland + 1.3% Non-crop/non-pasture + 0.8%

+2.1% +1.0% -0.3% +0.6% -0.4% -0.7%

-1.1% -0.8% 0.0%

+2.5% +1.0% +0.5%

Map legend, region averages: Cropland Pastureland Non-crop/non-pasture

+2.0%

+8.6% +2.2% +1.0%

+1.3% +0.7%

+4.9% +4.3% +4.0%

$/acre 3200 3000 2800 2600 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0

+1.6% -0.4% -0.5%

+1.2% +0.7% +0.3%

6% Trend

50 54 58 62 66 70 74 78 82 86 90 94 98 02 06 10 Year

+0.2% +1.8% +0.5%

-1.4% +0.4% -0.1%

n/a +4.7% +1.0% +0.3%