The increase in agricultural receipts in recent years has pushed up land values across the country, but some areas have benefitted more than others.
“The highest cropland values are in fruit and vegetable production areas on the coasts plus the Corn Belt states,” says Damona Doye, Sarkeys Distinguished Professor, Extension economist and Regents Professor at Oklahoma State University in Stillwater.
Cash rents in those hot spots are also highest, Doye said at the recent Rural Economics Outlook Conference on the OSU campus. Oklahoma cropland values and cash rents have trended upward but not at the pace observed in the Corn Belt states.
USDA-NASS data show that Oklahoma cropland values are the second lowest in the country, $1,190 per acre, ahead of only Montana’s $807 per acre. Texas land values were slightly higher at $1,650 per acre. Cropland cash rents in Oklahoma “are the lowest on average in the United States at $29.50 per acre.” Texas cash rents were $38 per acre.
High cropland values include $12,800 per acre in New Jersey, $9,230 per acre in California and $8,000 per acre in Arizona. Florida topped $6,000 and Midwest corn states Iowa and Illinois both topped $5,500 per acre in land values.
Cash rents for the higher-value farmland states were also higher: $268 per acre in California, $196 in Iowa, $183 in Illinois and $176 in Washington. New Jersey cash rent was not as high, $62 per acre.
Doye said Oklahoma pastureland values “are not the lowest in the country and have been trending at about $1,000 per acre in recent years.” Texas pastureland values are $1,500 per acre. Higher pasture values are found in the Midwest corn states and also to the east of Oklahoma. Georgia pastureland values, for instance, average $5,000 per acre. In Florida, pasture value averages $4,500 and in New Jersey pastureland may run as high as $13,900 per acre. Tennessee, North Carolina and Virginia all top $3,500 per acre.
Within Oklahoma, Doye said pastureland cash rents also trend higher to the east. Values are higher in Northeast Oklahoma, she said, where landowners have more improved pasture. “Along the I-35 Corridor and around urban areas, cash rent is higher.”
She said about one-third of Oklahoma’s pastureland is improved with two-thirds in native pasture. Average pasture cash rent across the state is $11.50 per acre. In Texas that figure is $7.50 per acre.
Doye said value of U.S. cropland and cash rents have trended upward since about 2004, with a U.S. average value in 2010 just above$3,000 per acre and average cash rent just below $120 per acre.
Values and cash rent for Oklahoma have leveled off since 2008, peaking at about $1,200 per acre for non-irrigated cropland and slightly less than $30 per acre for cash rent. Cropland value shows a significant increase since 1998, from about $600 per acre to almost $1,200 per acre. Cash rent has been mostly level over that same period, ranging from about $25 per acre to a high of $30 per acre around 2005.
Pasture land values in Oklahoma have increased from about $400 per acre in 1998 to just more than $1,000 per acre in 2011. Pasture cash rent has gone up from about $8 per acre in 1998 to $11.50 per acre.
Doye also discussed rent-to-value ratios for cropland and pasture. For the United States, cropland rent-to-value ratio declined from 5 to just under 4 from 1998 to 2011with the lowest point, 3, occurring around 2007 to 2008. For U. S. pasture, rent-to-value ratio dropped from 2 to 1 during that same time span with the biggest dip beginning around 2005 and then leveling off.
In Oklahoma, non-irrigated cropland rent-to-value ratio dropped from 4.5 to 2.4 from 1998 to 2011. For pasture in Oklahoma, the ratio moved from 2 to 1 during that period.