Land prices risingCropland values in North Dakota shot up 19 percent from 2009 to 2010, with prices in western Minnesota rising 22 percent, according to an annual survey of farm managers and rural appraisers.
By: Jonathan Knutson, Agweek
Cropland values in North Dakota shot up 19 percent from 2009 to 2010, with prices in western Minnesota rising 22 percent, according to an annual survey of farm managers and rural appraisers.
Strong farm profits are pushing up demand and prices for cropland, says Charles Peterson, Fargo, N.D.-based vice president/Farm Management Group for U.S. Bank.
Peterson, an accredited farm manager with 14 years of experience in the field, was in charge of the 14th annual North Dakota-Minnesota land value/rental rate survey.
Twenty-eight members of the North Dakota Chapter of the American Society of Farm Managers and Rural Appraisers participated in the survey of 73 counties in North Dakota and Minnesota.
The survey found 53 counties with double-digit increases from 2009, compared with 21 counties in 2009 with a double-digit increase from the previous year.
The 2009 to ’10 increase was most pronounced in northeastern North Dakota, which saw a 27 percent increase.
But the survey also found sizable jumps in other parts of the region:
- A 23 percent increase in southeastern North Dakota.
- a 22 percent increase in the Red River Valley of eastern North Dakota and western Minnesota.
- An increase of 21 percent in northwestern North Dakota.
- An increase of 15 percent in southwestern North Dakota.
Peterson says that, in his experience from attending area land sales, most of the land changing hands is being purchased by active farmers, not out-of-state investors.
Profits and prices
Profits in the past few years generally have been strong, allowing farmers to pay down debt and accumulate some money in the bank, he says.
With interest rates low, farmers find it attractive to use some of the money to buy land, pushing up land prices, Peterson says.
The survey also found widespread increases in cropland rental rates, pasture value and pasture rental rates also saw.
In North Dakota’s Ramsey County, for instance, the survey found that cropland rental rates rose from $45 to $65 per acre in 2009 to $50 to $75 per acre in 2010.
The rental rate for pasture in North Dakota’s Kidder County rose from $10 to $15 per acre in 2009 to $12 to $18 per acre in 2010, the survey found.