Land values in Wisconsin are rising despite falling corn, soybean and wheat prices in 2014 and 2013.
According to Arlin Brannstrom, faculty associate at the University of Wisconsin Center for Dairy Profitability in Madison, the statewide weighted average Wisconsin agricultural land values reached $3,935 in 2014. This was a 5% increase from 2013.
Dairy boosts values
Dennis Badtke, chief appraiser for Badgerland Financial, says strong milk prices in 2014 and competition among dairy farmers for land to produce feed for their cattle and spread manure on are the primary reasons farmland values in Wisconsin are still rising.
"For the second year in a row, farmers in neighboring states are seeing declining farmland values while farmland values are climbing here primarily due to the strength of the dairy industry in our state," he says. Another reason land values are climbing in the Dairy State, Badtke says, is land prices didn't increase as much in Wisconsin during the past nine years as they did in neighboring states like Iowa and Illinois.
Badtke says, he is seeing strong prices paid for some land this spring but prices are variable.
"Some areas are seeing strength and some are not," he says. "There aren't a lot of sales."
According to Brannstrom, farmland prices increased an average of 38% between 2006 and the end of 2014 while prices for farmland in Iowa and Illinois rose 50% or more between 2006 and 2012. Land values have backed off 12% from their peak in 2012 in Iowa and Illinois, he notes.
"Wisconsin's agricultural land values are low compared to some of our highly productive neighboring states – but a large portion of our land is not suitable for continuous row crop farming and a larger portion of our land is used for forage production, woodlots and pasture," Brannstrom says. "Growing degree days in northern Wisconsin also limit the growing season."
East Central Wisconsin saw the fastest percentage increase in land values over the past six years. The average price per acre for bare land was nearly the same in Southeast Wisconsin, East Central and South Central districts in 2014. The Southwest, Northeast and Central districts experienced declines in average sale prices in 2014. The West Central district sold the most acreage and the Northeast district sold the fewest acres, Brannstrom says.
A total of 94,459 acres of Wisconsin farmland sold in 2014 compared to 99,583 acres in 2013 and 131,837 acres in 2012.
While the state average price per acre increased modestly in 2014, there were wide variations in sale prices per acre. Eighteen percent of the sales were less than $2,000 per acre and only 17% of sales had prices above $6,000 per acre.
"Although the high priced sales make good headlines, they are relatively rare," Brannstrom says.