The overall economic recession, as well as the deflation in commodity markets, has caused, for the first time in 20 years, farm real estate prices to decline.According to Lauren Etter’s reporting for the Wall Street Journal on the annual statistical release by the United States Department of Agriculture, the report takes into account the value of the land and the buildings on the farm. The average value of all land and building on US farms was $2,100 per acre on January 1, 2009. That number represents a 3.2% decline from a year ago.
Last year the real estate value of US farms continued its decade-long increase in value. Net farm income last year hit a record $89 billion. This record was due, in part, to increased grain prices and interest in corn and soybeans as a biofuel sources. This year’s drop in real estate value could negatively affect the ability of farmers to get credit for loans.
Farm land real estate values are highest in the Northeast and lowest in the Mountain region of the country. As Etter reports, this is due, in part, to decreases in cattle prices. To read more about the report, or to read the Wall Street Journal article click here.
Posted: 08/05/09
