BOISE — Agricultural land values around the Northwest continue to increase, despite relatively low commodity prices.
“We would suspect that with commodity prices being low for the past two years, we would have seen some drop in (agricultural) land values, but that is not the case,” said John Chidester, an ag land assessor in East Idaho. “I’ve seen no indication that values are going down.”
USDA’s National Agricultural Statistics Service estimates the average value for all cropland in Idaho at $3,400 an acre in 2017, a 3 percent increase over $3,300 an acre in 2016. NASS estimates irrigated cropland value in Idaho at $5,150 an acre and non-irrigated cropland at $1,460 an acre. Both are up 3 percent from the previous year.
Around the nation, average cropland value is estimated at $4,090 an acre, unchanged from 2016 and below the $4,130 total in 2015 and $4,100 in 2014.
Bob Morrison, an independent ag land appraiser in Idaho Falls, said NASS Idaho estimates for 2017 appear solid.
“Ag land values have been steady to slightly increasing,” he said. “It’s surprising when you consider that commodity prices are down, but the values are still holding strong.”
Doug Robison, Northwest Farm Credit Services’ senior vice president for agriculture in Idaho, said ag land value trends have shown some gains on an annual basis with overall transaction counts declining.
“The combination of limited supply, investor appetite and low interest rates have provided strong support for land values,” he told Capital Press in an email. “Land values have been surprisingly resilient over the past few years. High-quality farm land remains in tight supply.”
NASS also projects that cropland values in Washington and Oregon are on the rise in 2017.
The agency estimates average cropland value in Oregon at $2,860 an acre, up 4.8 percent from last year, with irrigated cropland averaging $4,850 an acre and non-irrigated cropland at $2,120 an acre.
In Washington, average cropland value is estimated at $2,890 an acre, up 4.7 percent, with irrigated cropland at $8,700 an acre and non-irrigated cropland at $1,380 an acre.
According to a Northwest Farm Credit Services market report on 2017 ag land values, limited supply is anchoring land values in the Northwest “despite concerns surrounding weaker commodity prices. ... Both irrigated and dry cropland values continue to remain strong despite lower commodity prices for many crops.”
A large volume of the farm land sold in Idaho this year is purchased by investment groups that are keeping the land in farming, said Morrison.
“We’re seeing investment groups buying large blocks of farmland in southern Idaho,” he said. “These people are looking at farmland as an investment and ... it gives them an annual return.”
Most of the farmer-to-farmer land sales are in the neighborhood of 160 acres and purchased by producers from their neighbors, Morrison said.