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Rising Missouri land prices not likely to wane in 2022

Higher land prices will push up cash rents; farmers should lock in prices early with longer terms.

January 3, 2022

3 Min Read
farmstead on rural farm land
MORE TO FARM: To get a piece of paradise in the country will require buyers to fork over more money. The rise in land values affects both rural-living residents and row crop and livestock farmers.Mindy Ward

Buyers paid more for land in 2021, and University of Missouri agricultural economist Ray Massey says that is likely to continue in 2022.

Massey led the Missouri Farmland Values Opinion Survey report from University of Missouri Extension. He says several factors have driven cropland and pasture value changes, including high commodity prices, low interest rates and proximity to urban areas. In recent years, strong farm revenue contributed to increasing cropland values.

“If people have money in their pocket, they are willing to buy land, and they will pay more for it,” Massey says.

Cropland and pasture values

Conducted in September 2021, the land values survey collected responses from 88 Missouri lenders, farmers, rural appraisers and others familiar with Missouri land values. Values for cropland, pasture, timberland, and hunting or recreational land all increased from 2020 to 2021.

The value of good nonirrigated Missouri cropland averaged $6,326 per acre in 2021, an increase of 14% relative to 2020. Between 2017 and 2020, values for this cropland category annually increased 4.3% on average. Values per acre averaged $4,877 in 2017, and good nonirrigated cropland values increased by $1,449 per acre since then.

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The state’s irrigated cropland averaged $7,132 per acre in 2021, an 11% increase from 2020. The survey first included irrigated cropland in 2018. At the time, values per acre averaged $5,514. Since then, irrigated cropland values have increased by $1,618 per acre.

Pastureland values were reported as a state average of $3,781 per acre. Compared with 2020, values grew by 12% in 2021. Between 2017 and 2021, the average value for pastureland increased by $865 per acre.

Timberland and hunting or recreational land values

Land used for timber or hunting and recreation also increased in value in 2021. Missouri tracts used for hunting or recreation averaged $3,162 per acre in 2021 — an 18% year-over-year change. Values per acre averaged $2,048 in 2017, and they increased by $1,114 per acre in the past five years.

In 2021, Missouri timberland values averaged $3,070 per acre, which was 17% higher than 2020 values. Values per acre in 2017 averaged $2,012. Since then, timberland values have grown by $1,058 per acre.

Massey says the value of timberland or hunting land rose as commodity prices and investment earnings increased in 2020. For example, out-of-town investors who earn positive returns on their investments are able to purchase land for recreational purposes.

Cash rent rising?

Massey warns farmers that higher land values will likely result in higher cash rental rates.

Locking in cash rent for longer terms may mitigate the rise in price. Farmers should always get land rental agreements in writing.

Massey adds that these higher land values may also lead to an increase in the tax base, allowing communities to collect more revenue.

For more 2021 land values survey results, including regional breakdowns for Missouri land values, visit muext.us/landvalues to access the full report.

Source: University of Missouri Extension, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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