Farm real estate (including farmland and the structures on the land) accounts for over 80 percent of farm sector assets and represents a significant investment for many farms. Two major uses of farmland are cropland and pastureland.
From 2003 to 2014, U.S. cropland values appreciated faster than pastureland — with cropland values doubling in real terms.
However, cropland appreciation varied over time and by region. Between 2003 and 2008, cropland values appreciated almost uniformly across regions.
Between 2009 and 2014, cropland appreciation was highest for the Northern Plains, Lake States, Corn Belt, and Delta states. This reflected the relatively steep rise in commodity prices for the grain and oilseed often grown in those regions, which made the cropland more valuable.
However, between 2015 and 2017, the Northern Plains and Corn Belt experienced negative cropland appreciation, reflecting falling commodity prices and farm income.
Regional differences in land values may also be due to varying demands for farmland for nonagricultural purposes, such as demand for oil and gas development in shale areas.
The leveling or decline of cropland values observed in the Northeast, Southeast, and Pacific regions from 2009 to 2014 was likely a result of the Great Recession, which negatively influenced the value of cropland in close proximity to urban areas.
The accompanyting chart updates data found in the February 2018 ERS report, Farmland Values, Land Ownership, and Returns to Farmland, 2000-2016.