The value of an acres of good Missouri cropland rose $340 per acre or 7% compared to a year earlier, according to the University of Missouri. In a September survey conducted by Ray Massey and Hannah McClure, the average value of an acre of good cropland rose to $5,217. The survey pegged the average value of an acre of average-quality cropland at $4,175, poor cropland at $3,200 an acre and irrigated cropland at $5,514 an acre.
The survey also placed the value of an average acre of good-quality pastureland at $2,915 an acre, which is unchanged from a year earlier. An acre of average-quality pastureland is listed at $2,469 while poor-quality pastureland is pegged at $2,022 an acre.
Timberland was up $73 to $2,086 per acre. Hunting/ recreation land was up $107 to $2,155 per acre.
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. 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.
"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," note Massey and McClure.
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, they state. "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.'
They report 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, they report. 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.
Looking ahead, Massey and McClure state: "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%.
Average Per-Acre Value of Missouri Cropland
Average Per-Acre Value of Missouri Pastureland
Average Per-Acre Value of Missouri Timber/Hunting Land
Percent Annual Change Missouri Farmland Values