The National Agricultural Statistical Service (NASS) recently released its 2018 Land Value Report. The report shows that U.S. farm real estate value increased 1.9% to $3,140/acre while the average U.S. cropland value increased to $4,130/acre—an increase of $40/acre from 2017.
In the Delta states and Mid-South, cropland values increased from one year ago. Arkansas irrigated cropland increased 2.4% to $3,380/acre, and non-irrigated cropland values increased 2.5% to $2,050/acre. Irrigated cropland values in Mississippi increased 2.8% to $3,320/acre, while non-irrigated cropland values increased 1.6% to $2,520/acre. Missouri irrigated cropland values decreased 1.5% to $5,220/acre, but non-irrigated cropland values remained the same as 2017 at $3,700/acre. Tennessee cropland values increased 1.9% to $3,710/acre.
The USDA also releases average cash rents for the year. Although it is the opinion of Glaub Farm Management that cash rents generally provide the lowest return in the Mid-South, we can use the data for benchmarking and return on investment comparison. Overall, U.S. cropland rent was $138/acre, which equates to 3.3% cash return. The U.S. average total cropland return was 4.3% for 2018.
On a state-by-state basis, Arkansas irrigated cropland cash rent averaged $136/acre, which equates to a 4% cash return for a total return of 6.4% when appreciation is added. Arkansas non-irrigated cropland cash rent averaged $49/acre, leading to a 2.4% cash return for a total return of 4.9%. In Mississippi, irrigated cropland cash rent averaged $143/acre, which equates to a 4.3% cash return for a total return of 7.1% when appreciation is added. Mississippi non-irrigated cropland cash rent averaged a 3.3% cash return for a total return of 4.9% at $84/acre. Irrigated cropland cash rent in Missouri averaged $180/acre, meaning a 3.4% cash return for a total return of 1.9% when depreciation is factored. Missouri non-irrigated cropland cash rent averaged $125/acre, which equates to a 3.3% cash return for a total return of 3.3% since no appreciation was reported. Tennessee cropland cash rent averaged $98/acre with a 2.6% cash return for a total return of 4.5% when appreciation is added.
To view the full USDA Land Values report, click here (pdf).
To view the USDA Cash Rent information, click here (database).
