Farmland values rose for the fourth year in a row, thanks to record farm income last year, but the gain - 2 percent - is the smallest since values crashed in the 1980s, the government said Tuesday.
The Agriculture Department pegged the average value of farmland and buildings at $682 an acre at the start of this year. Some economists had expected values to top the $700 mark this year. The recession, however, dampened sales prices.In a companion report, the government said foreign investment in U.S. farmland climbed 13 percent during 1990 for a total of 14.45 million acres or slightly more than 1 percent. Foreign holdings have remained near that level for the past decade.
Farmland values are important because land often is a farmer's largest asset and because land values reflect the health of the agricultural sector.
"While strength in farm income and financial conditions did not produce large gains in farmland value at the national level, predominantly agricultural regions registered some of the largest increases," the department said in an annual report.
Land values climbed in six of the 10 farming regions, the government said.
Gains were led by an 8 percent increase in the Lake states of Michigan, Wisconsin and Minnesota and a 7 percent rise in the Mountain states of Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah and Nevada.
The Pacific region - California, Oregon and Washington - posted a 4 percent gain while the Corn Belt and Northern Plains were up 3 percent and the Delta states were up 2 percent.
Record cattle prices helped boost rangeland values in the Mountain states.
Values dropped 5 percent in the Appalachian states, 3 percent in the Southern plains and 1 percent in the Northeast. They held steady in the Southeast.
While land values are up 14 percent from their low of $599 an acre at the start of 1987, they still are 17 percent below the record of $823 set in 1982. Values increased 5 percent during 1987, 6 percent during 1988 and 4 percent during 1990.
"Because inflation rates of 3 (percent) to 4 percent in recent years have partially offset gains in nominal farmland values, a sustained recovery of `real' farmland values has not yet occurred," the department said. Land values, when adjusted for inflation, were 2 percent lower than one year ago.
In its other report, the department said 62 percent of land listed as foreign owned actually is held by U.S. firms but the law requires it to be registered as foreign-owned if as little as 10 percent of a firm's stock is held by foreign investors.
Average state values
Here is the Agriculture Department's state-by-state list of average farmland values per acre this year:
Maine, $978, down 4 percent.
New Hampshire, $2,148, down 4 percent.
Vermont, $1,142, down 4 percent.
Massachusetts, $3,612, down 4 percent.
Rhode Island, $4,827, down 4 percent.
Connecticut, $4,240, down 4 percent.
New York, $1,031, up 6 percent.
New Jersey, $4,912, up 6 percent.
Pennsylvannia, $1,757, down 3 percent.
Delaware, $2,248, unchanged.
Maryland, $2,196, down 9 percent.
Michigan, $906, up 8 percent.
Wisconsin, $853, up 8 percent.
Minnesota, $873, up 8 percent.
Ohio, $1,217, up 1 percent.
Indiana, $1,275, up 2 percent.
Illinois, $1,433, up 3 percent.
Iowa, $1,157, up 5 percent.
Missouri, $689, up 1 percent.
North Dakota, $368, up 8 percent.
South Dakota, $351, up 7 percent.
Nebraska, $556, up 1 percent.
Kansas, $467, up 1 percent.
Virginia, $1,295, down 15 percent.
West Virginia, $625, up 2 percent.
North Carolina, $1,243, down 2 percent.
Kentucky, $962, down 2 percent.
Tennessee, $988, down 1 percent.
South Carolina, $948, up 4 percent.
Georgia, $995, down 2 percent.
Florida, $2,133, up 2 percent.
Alabama, $791, down 6 percent.
Mississippi, $754, up 4 percent.
Arkansas, $770, up 3 percent.
Louisiana, $905, down 1 percent.
Oklahoma, $485, down 2 percent.
Texas, $481, down 3 percent.
Montana, $243, up 2 percent.
Idaho, $659, unchanged.
Wyoming, $153, up 3 percent.
Colorado, $410, up 15 percent.
New Mexico, $230, up 17 percent.
Arizona, $285, up 8 percent.
Utah, $403, up 4 percent.
Nevada, $219, up 13 percent.
Washington, $798, up 2 percent.
Oregon, $583, up 2 percent.
California, $1,787, up 5 percent.