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2017 Mid-South Cropland Values, Rents, and Investment Returns

The National Agricultural Statistical Service (NASS) released their 2017 Land Value report which showed the US farm real estate value increased 2.3% to $3,080/ac while the average US cropland value remained unchanged from 2016 at $4,090.  In the Delta States and Mid-South, cropland values increased from a year ago.  Arkansas irrigated cropland increased 3.1% to $3,300/ac and non-irrigated cropland values increased 2.6% to $2,000/acre.  Mississippi irrigated cropland values increased 2.5% to $3,230/ac while non-irrigated cropland values increased 0.8% to $2,480/ac.  Missouri irrigated cropland values increased 3.9% to $5,300/ac while non-irrigated cropland values increased 1.1% to $3,700/ac.  Tennessee cropland values increased 1.1% to $3,640/ac.

The USDA also releases average cash rents for the year.  Although it is the opinion of Glaub Farm Management cash rents generally provide the lowest return in the Mid-South, we can use the data for benchmarking and return on investment comparison.  Overall the US cropland rent was $136/ac which equates to 3.3% cash return.  No appreciation in value occurred so the US average total cropland return was 3.3% for 2017. 

Arkansas irrigated cropland cash rent averaged $132/ac which equates to a 4% cash return for a total return of 7.1% when appreciation is added.  Arkansas non-irrigated cropland cash rent averaged $43/ac which equates to a 2.2% cash return for a total return of 4.8%.  Mississippi irrigated cropland cash rent averaged $143/ac which equates to a 4.4% cash return for a total return of 6.9% when appreciation is added.  Mississippi non-irrigated cropland cash rent averaged $83/ac which equates to a 3.3% cash return for a total return of 4.1%.  Missouri irrigated cropland cash rent averaged $180/ac which equates to a 3.4% cash return for a total return of 7.3% when appreciation is added.  Missouri non-irrigated cropland cash rent averaged $121/ac which equates to a 3.3% cash return for a total return of 4.4%.  Tennessee cropland cash rent averaged $98.5/ac which equates to a 2.7% cash return for a total return of 3.8% when appreciation is added.

Total returns on Delta and Mid-south cropland continue to outperform the aggregated US cropland market.  Mid-south irrigated cropland total returns averaged at or above 7% while non-irrigated ranged from 4.1% to 4.5%.

To view the full USDA Land Values report, click here (pdf).

To view the USDA Cash Rent information, click here (database).

 

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