Average U.S. farmland values and rental rates rose in 2019, according to two new annual reports from the U.S. Department of Agriculture’s National Agricultural Statistics Service.
The national trend was reflected in most of the Upper Midwest. North Dakota, South Dakota and Montana generally had higher average farmland values and rental rates, although values and rates fell in Minnesota.
The reports didn’t address why average farmland values and rental rates rose at a time of generally poor crop prices and limited profits. But agricultural economists have said that unappealing returns from competing investments such as certificates of deposit can make farmland more attractive financially. Experts also say that some farmers remain financially sound and want to expand by buying or renting land.
Another factor, according to experts, is that Upper Midwest land prices rose relatively slowly compared to other parts of the country during the ag boom of 2008-2012, and consequently have more potential to rise now.
Nationwide, average cropland values rose 1.2% to $4,100 per acre in 2019. Average pasture values rose 2.2% to $1,400 per acre. Average per-acre rental rates for cropland rose marginally, from $138 in 2018 to $140 in 2019.
Here’s a closer look at North Dakota, Montana, South Dakota and Minnesota. Keep in mind that the statewide average frequently blurs big differences in different areas of the state.
North Dakota: Average cropland values, up 2.7% to $1,920 per acre. Average pasture values, up 5.7% to $820 per acre. Average cropland rental rates, up from $65 per acre in 2018 to $70 per acre in 2019.
Montana: Average cropland values, up 2% to $1,040 per acre. Average pastures values, up 1.9% to $680. Average cropland rental rates, up from $32 per acre in 2018 to $32.5 per acre in 2019.
South Dakota: Average cropland values, up 0.3% to $3,130 per acre. Average pasture values, up 1% to $1,050 per acre. Average cropland rental rates, steady at $119 per acre.
Minnesota: Average cropland values, down 2.8% to $4,810 per acre. Average pasture values, down 2.9% to $1,700 per acre. Average cropland rental rental rates, down from $167 per acre in 2018 to $164 per acre in 2019.
Again, the reports didn’t address why Minnesota bucked the national trend. But the dairy industry, important in Minnesota, has struggled in recent years, and parts of the state were hit with heavy, destructive rains earlier this year.
Another consideration is that while land prices generally rose on the Great Plains, they were flat or down in much of the Corn Belt and surrounding states.