Farm Real Estate Values

Figure 1 shows farm real estate values for Massachusetts and the other New England states. The New England region has some of the highest farm real estate values in the country. Massachusetts farm real estate values were $11,600 pre acre in 2006, second in the nation to Rhode Island ($12,500) and just ahead of Connecticut ($11,400). Trends in farm real estate values have been similar for Massachusetts, Connecticut and Rhode Island. Farm real estate values for Massachusetts grew at a rate of 6.9 percent from 1994 through 2006. After the decline in values from 1997 to 1998, Massachusetts values grew at a rate of 10.9 percent. Growth rates for Massachusetts have been the highest of the six New England states. Growth rates for Connecticut and Rhode Island since 1998 have been at nine percent and for the northern New England states, growth rates have ranged from 6.2 percent ( Vermont) to 7.9 percent ( Maine).

Farm real estate values have increased across the U.S., but as Figure 2 shows, the values vary greatly from region to region. The Northern Plains and Mountain states had average values per acre of under $1,000 in 2006, while average values per acre in the Northeast had values over $5,000 per acre. In the Northeast, values in Delaware and Maryland are rapidly approaching the values of the southern New England states. Since 1998, farm real estate values in Delaware and Maryland have grown at rates of 17.6 percent and 12.9 percent, respectively. The Southeast (10.7 percent) and Lake States (9.7 percent) regions have both seen growth rates that exceed those of the Northeast. The Northern Plains experienced the smallest growth rate during the period at 4.6 percent each year. The Lake States had the highest growth rate, at 8.8 percent per year. As expected, farm real estate values affect costs of production. For example, dairy farms in the regions with the highest real estate values also have the highest production costs, while dairy farms in the regions with the lowest farm real estate values have the lowest production costs.

 

As reflected in Figure 2, Table 1 shows that states in the Northeast have the highest average farm real estate values in the country. High real estate values extend from the southern New England states into the Mid-Atlantic region including New Jersey, Delaware, Maryland, and Virginia. Also in the top ten were Florida and California. The value of farm real estate is strongly associated with population density. In fact, eight of the states in Table 1, are also on the top ten list of states with the highest population densities, while California and Virginia are number 12 and 14, respectively (based on the 2000 Census).

 

Wyoming ’s farm real estate value per acre was about one thirtieth that of Rhode Island ’s in 2006, making it the state with the lowest farm real estate value. Every Plains state was among the ten states with the lowest farm real estate value states, except Texas which was just outside at number eleven. Also on the list were several Mountain states including Colorado , Montana , and Nevada . New Mexico , the state with the second lowest farmland values, is one of the states with the greatest growth in dairy farms. New Mexico had the second highest number of cows per dairy farm in 2004, indicating that dairy farmers have taken advantage of relatively low land costs. Seven of the states in Table 2 are also on the list of states with the ten lowest population densities. Kansas , Colorado , and Oklahoma are number 11, 14, and 16 respectively.

 

Source: Figures were constructed using data from the National Agricultural Statistics Service.