The USDA National Agricultural Statistical Service (NASS) recently released its 2019 Land Value Report. The report shows that the U.S. farm real estate value increased 1.9% to $3,160/acre (an increase of $60/acre from 2018), while the average U.S. cropland value increased 1.2% to $4,100/acre ( an increase of $50/acre from 2018).
In the Delta states and the Mid-South, cropland values increased from 2018. Arkansas irrigated cropland values saw an increase of 1.5% to $3,340/acre while non-irrigated cropland increased 3.5% to $2,060/acre. Irrigated cropland values in Mississippi experienced a 1.1% increase to $3,620/acre, and non-irrigated cropland values increased 1.8% to $2,770/acre. Missouri irrigated cropland remained at the same value as 2018 at $4,770/acre, but non-irrigated cropland saw a decrease in value of -0.9% to $3,350/acre. Tennessee cropland values increased 2.1% to $3,910/acre.
The USDA also releases annual average cash rent values on a national and per-state basis. 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, the cash rent for cropland in the U.S. was $140/acre, which is a $2/acre increase from 2018. This equates to 3.4% cash return. The U.S. average total cropland return was 4.8% for 2019.
On a state-by-state basis, Arkansas irrigated cropland cash rent averaged $136/acre, which equates to a 3.9% cash return for a total return of 5.4% when appreciation is added. Arkansas non-irrigated cropland cash rent averaged $49/acre, leading to a 2.3% cash return for a total return of 5.8%. Mississippi irrigated cropland cash rent averaged $143/acre, which equates to a 4.1% cash return for a total return of 5.2%. Mississippi non-irrigated cropland cash rent averaged $87/acre with a 3.1% cash return and a 4.9% total return. Irrigated cropland cash rent in Missouri averaged $186/acre for a cash return of 3.9%. The total return remains at 3.9% due to no appreciation being reported. Non-irrigated cropland cash rent for Missouri averaged $122/acre for a cash return of 3.6% and a total return of 2.7% once depreciation is factored. Cropland cash rent for Tennessee averaged $103/acre with a cash return of 2.6% and a total return of 4.7% when appreciation is added.
The entire publication can be read (Here).