N.D. farm land value growsFARGO — North Dakota agriculture is bucking a national trend. The state’s average per-acre farm real estate value, or the value of farmland and the buildings on it, rose this year to $780, up 1.3 percent from 2008, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.
By: By Jonathan Knutson , The Forum, The Jamestown Sun
FARGO — North Dakota agriculture is bucking a national trend.
The state’s average per-acre farm real estate value, or the value of farmland and the buildings on it, rose this year to $780, up 1.3 percent from 2008, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.
North Dakota was only one of five states in the contiguous 48 states to show an increase.
New York led the nation with a 2.1 percent increase.
The average per-acre farm real estate price in the lower 48 states fell 3.2 percent in the same period, reflecting declining crop and livestock prices, the USDA said.
Minnesota saw a 3.4 percent decline.
North Dakota’s farm real estate prices have been rising for years, said Andrew Swenson, North Dakota State University Extension Service farm management specialist.
“But the price of farmland here hadn’t been pushed (upward) as hard as in other parts of the country,” making North Dakota farm real estate less likely to fall when the ag economy weakens, he said.
The USDA said national economic woes hampered commercial and residential development in the past year, decreasing non-agricultural demand for farmland and pushing down its price.
That isn’t happening, at least not to the same extent, with farmland on the edges of Fargo-Moorhead, said Matthew Durbin, sales agent with Konrad Olson Commercial Real Estate in Fargo.
Undeveloped farmland continues to fill in with projects, he said.
Minnesota’s decline is a sign of trouble in the hog and dairy industries, where tough economic times have hammered producers, Swenson said.
Those two industries play a much bigger role in Minnesota than in North Dakota.
For instance, Minnesota produced 2.3 billion pounds of milk in April, May and June, with North Dakota producing 98 million pounds in the same quarter, according to USDA.
Though farm real estate values rose in North Dakota, cropland prices fell in the state.
The average value of North Dakota cropland this year dropped to $800, down 1.2 percent from 2008, USDA said.
But that decline was smaller than the drop in the national and Minnesota averages.
Nationwide, average cropland values fell 3.9 percent to $2,650 this year.
In Minnesota, the average cropland price fell 3.3 percent to $2,610.
Swenson said he doesn’t anticipate big declines in area cropland prices next year.
Wheat is North Dakota’s most important crop, and the area’s overall wheat yields promise to be good, improving the outlook for farmland prices, he said.