All classes of Missouri land values grew steadily in the past year, according to the University of Missouri Extension’s annual survey of farmers, rural appraisers, and agricultural lenders.
Ray Massey, MU Extension agricultural economics professor, heads the survey efforts. No governmental or public agencies in Missouri require the reporting of land values, said Massey. Despite the limited number of responses, the survey gives the best available estimates for tracts larger than 40 acres in Missouri. Low-interest rates and nonfarm recreational purchases pushed values upward in 2020. A couple of other factors brought new investors to the table. Buyers of farmland near metropolitan areas said that expansion of broadband internet made these properties more attractive to investors.
COVID-19 also nudged some city dwellers to buy property in rural areas to build a house. Massey said this likely is a short-term phenomenon and should not factor into long-term land values in these areas.
Respondents gave estimates of land values as of July 2020 for three classes of cropland and pasture (good, average, and poor), irrigated cropland, timberland, and hunting/recreational land.
This year’s respondents reported the statewide average value of good non-irrigated cropland at $5,555 per acre, $134 or 2 percent above the 2019 value. The average statewide value for irrigated cropland came in at $6,335, up $186 from the year before. The greatest increases in average values were in pastureland and timber/hunting/recreation land. However, values varied greatly throughout the state, Massey said. “This underscores the need to use caution when valuing any one parcel of land or using individual districts.”
Most respondents indicated that 60% of farmland buyers intend to farm the land themselves and 25% plan to rent the land to others. The remaining 12% bought the land for nonfarming purposes.
USDA estimates of cropland value are $999 per acre lower than the MU Extension survey’s estimate for average cropland. For pastureland, the USDA estimate is $833 less than the survey’s estimate. Missouri farmland and building values have steadily appreciated 6% per year since 1950, Massey said. USDA reported Missouri land values have been slightly under trend for the past two years.
Missouri timberland was up $251 to $2,561 per acre. Hunting/recreation land was up $125 to $2,581 per acre.
“Missouri Farm Land Values Opinion Survey” (MU Extension publication G401) is available online and as a free PDF download at THIS LINK.