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2018 Mid-South Cropland Values, Rents, and Investment Returns

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).

 

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