September 5, 2017 at 3:32 p.m.

Wisconsin farmland prices average $4,050

Values being nudged up by strength in grain markets

By By Ron Johnon- | Comments: 0 | Leave a comment

MADISON, Wis. - Prices for Wisconsin farmland continue to climb.
The value of farm real estate - including land and buildings - averaged $4,050 an acre as of Jan. 1. That's up eight percent from a year earlier, according to the National Agricultural Statistics Service (NASS).
Badger State values were above those for Minnesota, at $3,350 an acre, up 12 percent, and Michigan, at $3,850 an acre, up five percent. But in the neighboring states of Iowa and Illinois, land prices were even higher, at $5,600 and $5,700, respectively, and up 24 and 16 percent.
Both Iowa and Illinois grow more corn and soybeans than Wisconsin does. Those higher land prices in Wisconsin and neighboring states are partly due to "the strength of grain markets," said University of Wisconsin-Madison agricultural economist Bruce Jones.
Farmland values have been rising since the "corrections of the '80s," said Jones. "But they've been rising at a much more robust pace, due to higher commodity prices, than in prior decades. There's a lot of optimism about what farmland prices can do."
Looking only at cropland - and leaving out the value of buildings - Wisconsin posted an average worth of $3,950 an acre, up $300 from the year before, according to NASS. Nationally, cropland was worth an average of $2,350 an acre on Jan. 1.
The value of pastureland climbed, too. In Wisconsin, it stood at $2,090 per acre on Jan., 1, up $40.

Dairy competition
In some parts of Wisconsin, higher grain prices have little to do with rising land values. Instead, it all boils down to dairy farms needing more cropland that can take their operations' manure. This is especially true when larger operations must compete for cropland.
"If you've got sizeable money invested in facilities, and you want to make sure you can recoup that, you've got to have access to land," Jones said. "So those dairymen that are at the edge, in terms of having sufficient land to handle their manure, they're going to be constantly looking for land, particularly that which is adjacent to their own operations. In some respects, they're probably going to be willing to pay a bit of a premium."
Acquiring land that's somewhat close by is important. Driving a large tractor towing a manure spreader very many miles becomes expensive fast, Jones noted.
"We're kind of seeing it in the Madison area," Jones said. "When a tract becomes available, two or three dairymen can get real aggressive in their bidding, so you can see land going for $10,000 an acre or more."

Rise not continual
Wisconsin land prices have not risen steadily each year. Arlin Brannstrom, a farm management specialist with the University of Wisconsin Center for Dairy Profitability, said the statewide average fell about $100 per acre between 2008 and 2009. But it rose $65 in 2010.
"The (somewhat) steady land prices are surprising, considering the extremely difficult economic conditions in the dairy sector and in the general economy in recent years...Average ag land values actually declined in most of the northern half of the state - the area more heavily impacted by the dairy economy - while in the southern counties, prices mostly increased," Brannstrom said. What's more, land values vary depending on the size of the parcel being sold, Brannstrom said. For large parcels - those of 35 acres or more, the 2010 average rose to $3,254. That was up $67 from 2009. By contrast, average price for bare land in the 10-to-34-acre range fell $154 per acre, to $3,194.

County numbers
Of course, farmers don't buy or sell land statewide. They sell or buy it in a particular county. Here's a look at land values in selected Wisconsin counties. All are for bare land, between unrelated sellers and buyers, and between 35 and 1,200 acres.
In Buffalo County, the price rose by $1,336 during five years. In 2005 the average per-acre price stood at $1,803, but in 2010 it had risen to $3,139.
Crawford, another Mississippi River county, saw a much smaller price hike, $285. In 2010, land there averaged $2,173, up from $1,888 in 2005.
Grant County, followed suit. In 2005 the average cropland value was $2,316, but $3,853 five years later, for an increase of $1,537 per acre.
In Iowa County, the average land value rose $148 over five years. In 2005 it was at $2,822; in 2010 it was $2,970.
La Crosse County bucked the trend of higher land values. There, the 2005 average was $3,233, but in 2010 it was $3,222, a slip of $11.
Lafayette County, along the Illinois border, had its average cropland value shoot up $1,146. In 2005 the average price was $2,950, but by 2010 it had risen to $4,096.
Monroe County saw an increase of $632 per acre. From $1,875 in 2005, it had risen to $2,507 by 2010.
Pepin County recorded an increase of $424 an acre. Cropland there averaged $2,346 in 2005, but $2,770 at the end of 2010.
Pierce County cropland fell in value by $1,586 per acre. It slid from $5,251 in 2005 to $3,665 in 2010.
A neighboring county, St. Croix, also experience a steep drop in cropland values: $1,943 per acre. Cropland there averaged $5,037 in 2005, but just $3,094 in 2010.
Trempealeau and Vernon counties join the ranks of those recording increases. The average price of Trempealeau County cropland rose $923, going from $1,765 to $2,688. In Vernon County, the increase was $834 per acre, going from $2,142 in 2005 to $2,976 in 2010.

Highest: Waukesha
Wisconsin's highest priced cropland in 2010 was in the southeast's Waukesha County, which adjoins Milwaukee County, the home of the state's largest city. In Waukesha County, cropland averaged $9,634 an acre.
Other counties with relatively expensive cropland in 2010 were: Washington - $6,417; Kenosha - $6,394; Dane - $5,741; Brown - $5,548; and Walworth - $5,318.
The least expensive cropland in 2010 was in far northwest Wisconsin's Douglas County. An acre there sold for an average of $912.

Mixed blessing
Brannstrom calls the general rise in land values a "mixed blessing" for dairy farmers.
"The appreciation in land value is only realized when the assets are sold," he wrote in a paper published this past February. "In most cases, the ongoing business is neither directly responsible for, nor directly benefited by, changes in land values. High land values provide the retirement cushion for 'last-generation' dairy businesses. However, high land prices make it more difficult for new entrants to get started in dairy production without significant help from family members or other benefactors."[[In-content Ad]]


You must login to comment.

Top Stories

Today's Edition



27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

To Submit an Event Sign in first

Today's Events

No calendar events have been scheduled for today.