North Dakota Cropland Values Ease 1%
The value of North Dakota cropland is holding steady and dropped just 1% in 2016, reports Andrew Swenson, North Dakota State University Extension farm management specialist. He studied data from the annual land values and cash rent survey the North Dakota Department of Trust Lands conducted in January.
Swenson’s analysis differs from other surveys pointing to a 7% to 8% decline in North Dakota cropland values. He suggests stronger-than-expected 2016 net farm income because of record corn and soybean yields likely held up values in the state survey. Soybean and corn yields shattered state records by 14% and 20%, respectively. Also, soybean-harvested acreage set a record and corn acreage hit its third-highest level in history.
Red River Valley Leads
The most recent county-level survey shows per-acre cropland values rose 5.5% to $4,083 in the south Red River Valley region compared to the previous year. The northwest region saw a 3.8% boost to $1,230 per acre. The east-central and north Red River Valley regions show a 2.3% increase to $2,061 and $3,035, respectively.
The southwest region had the greatest decrease, 7% to $1,326, followed by the south-central region with a 4.5% decrease to $1,597. Regions with declines between 2.7% and 3.6% were the northeast, the southeast and the north-central.
The survey showed average cash rent per acre for cropland increased by 2% from January 2016 to January 2017 after a 3.4% decline the previous year. The greatest increases were 4.4% in the southeast region, 3.8% in the northeast and 3.2% in the south-central region. Other regions showed incremental increases.
Value Realignment
Although this marks a third consecutive year of decreases, the declines follow an explosive rise in cropland values. For the period of 2003 to 2016, the smallest percentage gain reported was 5%, noted in 2009. Double-digit gains occurred seven times during the 14-year period—half of the time. The kicker is the eye-popping 42% explosion in 2012, when the energy boom in northwest North Dakota combined with strong yields and high prices to send cropland prices sharply higher. After the record run, consecutive years of 1%, 4% and 1% declines are hardly unexpected.
The south Red River Valley region sports the state’s highest average cropland prices. That region has seen strong competition for farmland as the expansion of corn and soybeans into the region has competed aggressively with sugar beets and wheat. The result has been a slight rebound in area cropland values to an average of $4,038 per acre as of Jan. 1.
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