MU Ag Economist Analyzes Latest USDA Land Value Survey

The findings of USDA's latest land value survey are a bit worrisome to Ron Plain, University of Missouri Extension ag economist. The annual Land Values and Cash Rents Report issued by USDA last week made headlines with word that land value rates as of Jan. 1, 2009 dropped 3.2% from last year.

"This is the first drop in Missouri or U.S. land values since the Jan. 1, 1987 survey," Plain says. Jan. 1, 2009 land values in Missouri were down 4.3% from the previous year. Still, those land values are the second highest ever and 1.4% higher than on Jan. 1 2007, and 78.8% higher than on Jan. 1, 2000.

"The drop in land prices reflects 'bursting the bubble' on corn prices caused by the boom in the ethanol industry," Plain says. "But it also reflects less demand from urban interests for rural land. The recession has hurt the value of hunting and recreational use land."  

Plain and his colleagues expect cash rental rates to be lower in 2010 than this year given the sharp drop off in corn, wheat and soybean prices.

MU Extension plans to have its July Missouri land survey data by the end of the month. Plain notes that preliminary data indicates that the July 2009 values are below the July 2008 values.

Historical Perspective

Missouri land values peaked in the USDA's Jan. 1, 1981 survey and decline by about a third during the "farm crisis' years of the 1980s. Here are the USDA numbers for Missouri farmland for the last 30 years, compiled by Ron Plain, MU Extension ag economist.

            Year                 $/acre               % change

1980	902	24.2
1981	990	9.8
1982	945	-4.5
1983	856	-9.4
1984	875	2.2
1985	689	-21.3
1986	648	-6.0
1987	604	-6.8
1988	640	6.0
1989	684	6.9
1990	701	2.5
1991	723	3.1
1992	734	1.5
1993	774	5.4
1994	825	6.6
1995	880	6.7
1996	950	8.0
1997	1010	6.3
1998	1070	5.9
1999	1150	7.5
2000	1230	7.0
2001	1300	5.7
2002	1380	6.2
2003	1470	6.5
2004	1560	6.1
2005	1750	12.2
2006	1910	9.1
2007	2170	13.6
2008	2300	6.0
2009	2200	-4.3