Agricultural Land Values and Cash Rents Reach New Highs
Agricultural Land Values and Cash Rents Reach New Highs Northern Ag Network
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Agricultural Land Values Increase in 2023
The USDA’s National Agricultural Statistics Service released the Land Values 2023 Summary report on August 4, revealing that agricultural land values increased by $280 per acre over the course of the year. This marks a 7.4% increase following the record-breaking increase of $420 per acre (12%) in 2022 compared to 2021. The rise in land values poses a significant challenge to farmers and ranchers, adding to the overall production costs and barriers to profitability they face.
Farm Real Estate Value
The average farm real estate value in the United States reached a record high of $4,080 per acre, reflecting a 7.4% increase from the previous year. While this increase is lower than the 12% jump seen between 2021 and 2022, it is still the second-highest increase since the USDA began conducting the survey in 1997. The rise in real estate values is particularly prominent in areas with high-value crops and limited developable land near urban areas. Midwest states, followed by the South and Pacific Northwest, experienced higher real estate values compared to the Plains and Mountain states. Factors contributing to this increase include high commodity prices, government program incentives, competing land-use interests, and increased investments in hard assets like land.
Cropland Value
The average U.S. cropland value increased to $5,460 per acre in 2023, representing an 8.1% jump from the previous year. While this increase is slightly higher than the 7.8% increase in 2021, it falls short of double-digit percentage increases seen in previous years. California and Northeastern states have the highest average cropland values, followed by the Midwest, Florida, and Arizona. Kansas, Nebraska, and the Dakotas experienced the highest percentage growth in cropland values, with gains of 17%, 14%, and 13% respectively.
Pastureland Value
Pastureland values also saw strong gains in 2023, with an average value of $1,760 per acre in the U.S. This represents a 6.7% increase from the previous year, following several years of little to no increases. The distribution of pastureland values differs from cropland values and real estate values, with higher values concentrated along the East Coast and in the mid-South. The Midwest and Plains regions have lower pastureland values due to a significant portion of grazeable land being owned by the federal government and leased to ranchers. Development pressures and competition for open land contribute to higher pastureland costs in densely populated areas.
Cash Rent Increases
The increase in land values has translated to higher cash rents. Average U.S. cropland rent rose to $155 per acre in 2023, a 4.7% increase from the previous year. Cash rents for pastureland increased by 7.7% to $15 per acre. These increases in cash rent can threaten the margins and profitability of producers who rely on rented land. Washington and Georgia experienced the highest percentage increases in cropland cash rental rates, while decreases were observed in Oklahoma, Wyoming, and Nevada.
Conclusion
The USDA’s land value report highlights the continued increase in agricultural real estate values, cropland values, and pastureland values. These increases pose challenges for farmers and ranchers who are already facing heightened input costs and inflationary pressures. While landowners may benefit from increased equity, these rising costs create barriers to entry for new farmers and those who rely on rented land. Addressing these challenges and promoting sustainable agricultural practices aligns with the Sustainable Development Goals (SDGs), including Goal 2: Zero Hunger and Goal 12: Responsible Consumption and Production.
SDGs, Targets, and Indicators Analysis
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 1: No Poverty
- SDG 2: Zero Hunger
- SDG 8: Decent Work and Economic Growth
- SDG 11: Sustainable Cities and Communities
- SDG 15: Life on Land
The issues highlighted in the article include the increase in agricultural land values, cash rent values for cropland and pastureland, and the overall health of the agricultural economy. These issues are connected to the SDGs mentioned above, as they relate to poverty reduction, food security, economic growth, sustainable urban development, and land conservation.
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property.
- SDG 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists, and fishers.
- SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product growth per annum in the least developed countries.
- SDG 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated, and sustainable human settlement planning and management in all countries.
- SDG 15.1: By 2020, ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains, and drylands, in line with obligations under international agreements.
Based on the article’s content, the targets mentioned above are relevant as they address the need for equal access to economic resources and land ownership, increasing agricultural productivity and incomes, promoting economic growth, sustainable urbanization, and land conservation.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Indicator 1.4.2: Proportion of total adult population with secure tenure rights to land, with legally recognized documentation and who perceive their rights to land as secure, by sex and by type of tenure.
- Indicator 2.3.1: Volume of production per labor unit by classes of farming/pastoral/forestry enterprise size.
- Indicator 8.1.1: Annual growth rate of real GDP per capita.
- Indicator 11.3.1: Ratio of land consumption rate to population growth rate.
- Indicator 15.1.1: Forest area as a proportion of total land area.
The article does not explicitly mention these indicators, but they can be used to measure progress towards the identified targets. These indicators would provide data on land tenure rights, agricultural productivity, economic growth, land consumption, and forest area.
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 1: No Poverty | Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property. | Indicator 1.4.2: Proportion of total adult population with secure tenure rights to land, with legally recognized documentation and who perceive their rights to land as secure, by sex and by type of tenure. |
| SDG 2: Zero Hunger | Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists, and fishers. | Indicator 2.3.1: Volume of production per labor unit by classes of farming/pastoral/forestry enterprise size. |
| SDG 8: Decent Work and Economic Growth | Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product growth per annum in the least developed countries. | Indicator 8.1.1: Annual growth rate of real GDP per capita. |
| SDG 11: Sustainable Cities and Communities | Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated, and sustainable human settlement planning and management in all countries. | Indicator 11.3.1: Ratio of land consumption rate to population growth rate. |
| SDG 15: Life on Land | Target 15.1: By 2020, ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains, and drylands, in line with obligations under international agreements. | Indicator 15.1.1: Forest area as a proportion of total land area. |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: northernag.net
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