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2019 Mid-South Cropland Values, Rents, and Investment Returns

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).

 

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