Landowners who purchased Missouri property in 2021 paid more for land than buyers who purchased land in 2020, according to the latest Missouri Farmland Values Opinion Survey report from the University of Missouri Extension.
Agricultural economist Ray Massey, who led the survey, projects the upswing in land values will continue. He says higher land values will result in higher cash rental rates. Higher land values may also lead to an increase in the tax base, allowing communities to collect more revenue.
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/recreational land all increased from 2020 to 2021.
Cropland and pasture values
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.
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.
Massey 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.
Timberland and hunting/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.
According to Massey, 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.
For more 2021 land values survey results, including regional breakdowns for Missouri land values, visit the MU Extension website to access the full report.