Missouri Farm Land Values Opinion Survey – 2017 Ray Massey and Hannah McClure

A web based survey was conducted in September 2017 to determine what people think has been happening to farmland values in Missouri. The survey was sent to persons we expected to have a good handle on land values. Ag lenders, rural appraisers and farmers received the survey. In Missouri, land sales prices need not be reported to any governmental or public agency. We hope the opinions expressed by our survey respondents will be helpful to others needing to estimate current farmland values and trends. Of the 131 usable surveys in 2017, 55% came from lenders, 12% from rural appraisers, 24% from farmers and 9% from other occupations. They provided their opinions to questions concerning current farmland values and trends. They were asked to exclude from their answers tracts smaller than 40 acres or land being converted to development or commercial uses. Average Value of Land Respondents were asked to give their estimates of land values as of July 2017 for three classes of cropland and pasture (good, average, poor), timberland (with valuable trees), and hunting/recreation land (land with little productive agricultural value but with desirable aesthetic qualities). Classification of land was left to the judgment of each respondent. Their responses are summarized on Maps 1, 2 and 3 on the following pages. This year's respondents reported value of good cropland of $4,877/acre was up $200, or 4.3% above last year. There was a wide range of price changes across the state – some increased, others decreased. Good pastureland was estimated to have a statewide average value of $2,916/acre, an increase of $232 or 8.6%. Timber land was up $105/acre to $2,012/acre. Hunting/recreation land was up $241/acre to $2,048/acre. Who Is Buying Land? Survey respondents thought land buyers were purchasing land for reasons similar to last year. Sixty eight percent of farmland buyers were planning to farm the land themselves; 21% were planning to rent out the land; 11% were planning to use it for non-farming purposes (Map 4). Factors Affecting Values Comments from respondents varied greatly on what they thought was affecting land values. Some indicated that sustained cattle prices kept land from going lower. Others mentioned that good cropland rarely comes on the market and therefore, when it does, the price necessary to buy it continues to be high. Others indicated that some land is for sale at high prices and is staying on the market for longer periods of time. Low interest rates also had a positive impact on land values. Several respondents noted investors are back in the market. An influx of Amish and Mennonite buyers continue to create increased demand in a certain regions. Some respondents noted that cash rents were holding steady, causing land values to hold steady. While we asked respondents to report only values for land intended to be used for agriculture, several noted that land closer to roads and cities was continuing to show strength. Tracts smaller than 40 acres were not supposed to be reported but several respondents indicated good interest in small tracts for hobby farms and residences. Off farm income is also supporting land values. Outlook Over the next 12 months, respondents expect cropland values to increase 0.3%, pasture values to increase about 0.6% and non-crop/non-pasture values to increase 1.3% (Map 5). This publication is dedicated to Joyce White and Ron Plain who conducted this survey since 2000. Both retired, leaving a big hole in the Extension activities of the University of Missouri Department of Agriculture and Applied Economics. Our use of a web-based survey rather than a mailed survey, such as Ron and Joyce always used, could be responsible for some of the differences in results from last year.

577144853294

542842103130

402334422596

566846003545

632447093503

617540723006 5598

43953459

512942743269

364629172342

351730232648

570034402400

374526892059

Good croplandAverage croplandPoor cropland

529133732336

583147943763

687540002625

537547504125

701058424112

459035402684

508531662341

Map legend, region averages:

Missouri AverageGood cropland $4877Average cropland $3856Poor cropland $3001

369028962410

Map 1. Estimated cropland values per acre for July 2017

318627171995

297525042064

276924382046

312327952355

334227372213

306826152031 3359

27672264

336427872236

249220461669

255421401781

265721571586

211118111498

Good pasturelandAverage pasturelandPoor pastureland

211518171467

367831842759

203318001425

380033753000

301721801550

272223831987

247419581576

Map legend, region averages:

Missouri AverageGood pastureland $2916Average pastureland $2446Poor pastureland $2002

269222401815

Map 2. Estimated pastureland values per acre for July 2017

20022269

25582285

20152050

25232291

22212114

21901977

25802426

186119381427

1427

17601947

18791793

13611300

Timber landHunting/recreation land

14311196

24133137

1367892

23753450

13581531

20532009

14501459

Map legend, region averages:

Missouri AverageTimber land $2012Hunting/recreation land $2048

17601742

Map 3. Estimated timber and hunting/recreation land values per acre for July 2017

63%27%10%

67%24%9%

68%28%5%

66%31%3%

63%27%10%

66%26%8% 56%

34%10%

76%12%12%

72%15%13%

78%17%5%

82%3%

15%

80%3%

17%

Operate farm themselvesRent it outNot use for ag production

67%10%23%

52%39%9%

44%10%46%

53%28%20%

73%25%2%

62%30%7%

69%9%

22%

Map legend, region averages:

Missouri AverageOperate farm themselves 68%Rent it out 21%Not use for ag production 11%

76%10%14%

Map 4. Use to be made of farmland purchased in 2017

-1.9%-1.5%-0.4%

-1.3%-0.5%+1.2%

+1.4%-0.1%+0.5%

-2.5%-4.1%+0.2%

-0.7%-1.1%+1.6%

-0.1%-1.1%+0.2% -0.8%

+0.4%+1.4%

-0.6%+2.6%+1.7%

+3.4%+1.5%+0.5%

+0.8%+0.6%+1.7%

+2.9%+2.9%+2.4%

+2.3%+2.9%+2.4%

CroplandPasturelandNon-crop/non-pasture

+2.4%+3.5%+2.8%

-2.4%-1.1%+0.1%

+4.7%+2.8%+4.0%

-1.0%+1.5%+2.5%

+0.4%+0.2%+0.0%

-0.5%+0.6%+0.3%

+2.9%+4.2%+3.9%

Map legend, region averages:

Missouri Average ChangeCropland +0.3%Pastureland +0.6%Non-crop/non-pasture +1.3%

+1.6%+2.1%+2.6%

Map 5. Forecasted percent change in Missouri farmland values between July 2017 and July 2018

Cropland PastureAll land & buildings

Missouri $3,820 $1,970 $3,350

Kansas $1970 $1,280 $1,850

Arkansas $2,790 $2,520 $3,180

Iowa $8,100 $3,100 $8,000

Illinois $7,350 $3,300 $7,300

Cornbelt (IN,IL, IA, MO, OH) $6,670 $2,380 $6,260

U.S. (average 48 state) $4,090 $1,350 $3,080

Agricultural Land Values Per Acre June 2017(USDA/NASS)

All Farmland & Buildings, 1950-2017Missouri Values, USDA/NASS

0

500

1000

1500

2000

2500

3000

3500

4000

1950

1953

195

6

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

199

5

1998

2001

2004

2007

2010

2013

2016

$/a

cre

Year

Value 6% Trend