Missouri Farm Land Values Opinion Survey – 2018 Ray Massey and Hannah McClure

A web based survey was conducted in

September 2018 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 116 usable surveys in 2018, 66% came

from lenders, 18% from farmers, 9% from rural

appraisers, and 8% 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 2018 for three classes

of cropland and pasture (good, average, poor),

irrigated cropland, 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 the value of

good cropland at $5,217 per acre, up $340 or

7% 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 $2,915 per acre – no change from last

year’s estimated value of $2,916. Timberland

was up $73 to $2,086 per acre. Hunting/

recreation land was up $107 to $2,155 per acre.

This is the first year the survey asked

respondents for their opinion of irrigated

cropland. The average statewide value they

reported for irrigated cropland was $5,514.

Map 4 displays the percent change in reported value from the 2017 survey to the 2018 survey for good cropland, good pastureland and timber/hunting/recreational land. Last year respondents expressed their outlook

for land values. They forecasted increases of

0.3% for cropland, 0.6% for pastureland and

1.3% for timber/hunting/recreational land.

While they did not get the percentage correct,

they did get the direction correct. Average land

values held steady or showed slight growth in

2018.

Who Is Buying Land? Survey respondents thought that 61% of

farmland buyers were planning to farm the land

themselves; 30% were planning to rent out the

land; 8% were planning to use it for non-

farming purposes (Map 5). This result indicates

that more land buyers were expected to rent

their recently purchased land than last year

where 68% were expected to farm the land

themselves.

Factors Affecting Values Despite last year’s respondents forecasting

slight rises in land values, this year’s survey

respondents seemed to express surprise at how

strong land values have remained. One person

said, “With the uncertainty of ag tariffs limiting

the sale of ag commodities, the depression of

ag commodity prices and the likely increase in

interest rates, I am surprised that the land

values have remained as strong as they have.”

Several respondents who indicated their

expectation of decreasing land values indicated

that the current market for agricultural

commodities was the most important factor. On

the other side, several of the respondents

acknowledged low commodity prices might be

putting downward pressure on land prices but

said other factors were overcoming the

downward pressure of commodity prices.

Reasons cited for land prices rising included

investors and old money. Farmers whose

financial reserves were sufficient to allow them

to purchase land were keeping the limited

amount of land coming into the market from

falling. Investors who intended to rent the land

were able to keep prices stable to increasing.

Buyers looking for recreational land also

factored into keeping land prices up.

Outlook

Given the amount of respondents expressing

surprise over how strong land values have

remained, it is not too surprising that the

average of expectations for land values next

year is for it to be down. Over the next 12

months, respondents expect cropland values to

decrease 0.6% and pasture values to decrease

about 0.4%. Timber/hunting/recreational values

are expected to increase 0.4% (Map 6).

USDA Land Value Data Table 1 reports the USDA estimates of average

land values for Missouri and surrounding states.

The $3,820 estimate of the USDA is $355 lower

than the $4,175 value reported by our survey

respondents. The real value of this data is in

comparing values in different states.

Figure 1 shows the trend in Missouri farmland

and building values over time. There has been a

consistent 6% appreciation of value since 1950.

Current values are slightly above the 6% trend.

$6,359$4,856$3,444$6,977

$5,217$4,180$3,136$4,900

$4,550$3,467$2,750$3,800

$5,738$4,476$3,440$3,938

$5,640$4,406$3,390$5,982

$5,971$4,359$3,265$6,125

$4,895$4,095$3,365$5,459

$3,356$2,673$2,135$4,535

$3,114$2,512$2,162$3,291

$3,615$2,980$2,483$4,047

N/AN/AN/AN/A

$6,175$5,275$3,438$6,250

$6,836$5,601$4,013$7,037

$4,693$3,483$2,772$5,340

$2,809$2,248$1,847$2,740

Missouri Average

$3,552$2,975$2,582$3,840

Map 1. Estimated cropland values per acre for July 2018

Good croplandAverage croplandPoor croplandIrrigated cropland

Map legend, region averages:

$5,217$4,175$3,200$5,514

Map 2. Estimated pastureland values per acre for July 2018

$3,206$2,700$1,878

$2,800$2,368$2,020

$2,717$2,350$2,092

$3,021$2,557$2,295

$3,543$2,816$2,212

$3,447$2,776$2,206

$3,146$2,757$2,314

$2,342$2,057$1,755

$2,658$2,379$1,973

$2,513$2,113$1,697

N/AN/AN/A

$2,950$2,106$1,563

$2,833$2,214$1,724

$2,524$2,233$1,861

$2,535$2,130$1,736

Missouri Average

$2,763$2,477$2,050

Good pasturelandAverage pasturelandPoor pastureland

Map legend, region averages:

$2,915$2,469$2,022

Map 3. Estimated timber and hunting/recreation land values per acre for July 2018

$2,256$2,513

$2,040$2,048

$2,050$2,000

$2,460$2,300

$2,313$2,521

$2,323$2,335

$2,295$2,408

$1,624$1,688$1,664

$1,844

$1,932$2,353

N/AN/A

$1,475$1,338

$1,504$1,362

$2,130$2,152

$1,899$1,782

Missouri Average

$1,975$2,000

Timber landHunting/recreation land

Map legend, region averages:

$2,086$2,155

Map 4. Percent change in estimated Missouri farmland values between July 2017 and July 2018

Missouri Average

Good croplandGood pasturelandTimber/hunting/recreational land

Map legend, region averages:

+7.0%+0.0%+4.4%

+10.2%+0.6%

+11.6%

-3.9%-5.9%

-15.6%

+13.1%-1.9%-0.4%

0.5%-2.2%+1.5%

-10.8%+6.0%

+11.5%

-3.3%+12.4%+11.8%

-13.0%-7.1%-7.3%

-34.6%-30.4%-12.8%

-14.6%+6.6%

+22.9%

+3.4%-2.9%

+13.6%

N/AN/AN/A

-9.0%+44.6%+23.1%

-1.7%-2.6%+0.1%

+2.2%-7.3%+5.4%

-35.7%+14.1%+33.0%

-10.3%+4.2%

+16.6%

Map 5. Use to be made of farmland purchased in 2018

62%28%11%

66%28%6%

55%41%5%

65%32%4%

63%26%11%

65%28%8%

46%42%12%

58%34%8%

68%25%6%

71%24%5%

N/AN/AN/A

55%37%8%

68%27%5%

46%45%9%

70%19%11%

Missouri Average

76%17%7%

Operate farm themselvesRent it outNot use for ag production

Map legend, region averages:

61%30%8%

Map 6. Forecasted percent change in Missouri farmland values between July 2018 and July 2019

-2.9%-2.0%+1.9%

+0.2%-0.5%+0.7%

-2.1%-1.5%+0.6%

-2.1%-2.2%+0.4%

+0.0%-0.4%+0.4%

-2.4%-1.9%-1.8%

-0.1%-0.6%-0.2%

+3.2%+1.7%+1.5%

+1.7%+2.2%+1.9%

+0.7%+0.4%-0.2%

N/AN/AN/A

+0.0%+0.5%+0.2%

-0.6%+0.1%+0.4%

-3.5%-1.7%-0.5%

+2.0%+2.7%+1.7%

Missouri Average

-0.1%+0.6%+0.7%

CroplandPasturelandTimber/hunting/recreational land

Map legend, region averages:

-0.6%-0.4%+0.4%

Cropland PastureAll land & buildings

Missouri $3,820 $2,100 $3,700

Kansas $2,010 $1,280 $1,800

Arkansas $2,850 $2,600 $3,250

Iowa $8,100 $3,100 $8,080

Illinois $7,450 $3,270 $7,450

Cornbelt (IN,IL, IA, MO, OH) $6,710 $2,470 $6,430

U.S. (average 48 state) $4,130 $1,390 $3,140

Table 1. Agricultural Land Values Per Acre June 2018

Figure 1. All Farmland & Buildings, 1950-2018, Missouri Values

0

500

1000

1500

2000

2500

3000

3500

4000

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

198

6

1989

1992

1995

1998

2001

2004

2007

2010

2013

2016

$/a

cre

Year

Value 6% Trend

Source: (USDA/NASS)

Source: (USDA/NASS)