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Industry At A Glance: Land values take a breatherIndustry At A Glance: Land values take a breather

The hot land market is cooling just a little.

Nevil Speer

August 10, 2015

2 Min Read
Industry At A Glance: Land values take a breather

The largest asset associated with any form of agriculture revolves around land. And land-value appreciation over time has been, and continues to be, an important source of growing the balance sheet for all types of operations. As such, USDA’s annual land value report is always an important benchmark for what’s going on across the country.

The recent USDA report clearly indicates the run-up in both cropland and pasture is beginning to take a breather. While both are at new all-time highs—$4,130 per acre and $1,330 per acre for cropland and pasture, respectively—the year-over-year gains are beginning to flatten out. Most notably, cropland gained only $30 per acre on a national average basis – that’s less than 1/10 of the previous four years, in which the gains averaged $350 per acre on an annual basis. 

Meanwhile, pasture values also gained $30 per acre. However, proportionally-speaking, that $30 increase equates to around a 2.5% increase, versus cropland where the increase amounts to less than 1%. The difference is important and speaks to the ongoing shift in agriculture. Livestock receipts are becoming increasingly important again to the nation’s farm economy and land values are responding accordingly. 


And following a long uptick in cropland values compared with pasture values, the ratio between the two has also begun to flatten out—hovering around 3:1 for the past several years. That said, how do you perceive the difference between cropland and pasture values in your area? Do you foresee land values, in general, beginning to slow down? Will availability be an issue in your area over the long run? That is, are there opportunities to grow your operation in the coming years through land acquisition?

Leave your thoughts in the comments section below.

Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited.  The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited and Natural Gas Exchange Inc.


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About the Author(s)

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

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