Rising Land Values Benefit Texas Ranch Owners More Than Most
In the past year only two states outgunned Texas: Nebraska (8.6%) and Missouri (6.6%) in the pastureland category, and Missouri alone (10.4%), in farm real estate values. Texas was unmatched nationwide for its cropland value appreciation.
A new report by the U.S. Department of Agriculture finds that land values in the United States have risen substantially in the past year, including in Texas.
According to the survey, cropland value per acre increased 1% nationally from 2017 values. Last year, an acre of farmland would have cost the average investor $4,090 to purchase; today it’s worth $4,130.
For investors in the Lone Star State, Texas land rose in value by 4.5% of 2017 values, considerably faster than the national rate, with one acre costing an average of $2,010 last year and $2,100 this year.
The numbers become even more impressive for owners of pastureland. In the United States as a whole, values rose 3% - from $1,350 in 2017 to $1,390 in 2018. In Texas, the rate of increase was again greater than the rest of the U.S. (6.1%, rising from $1,650 to $1,750).
The best value for Texans was in farm real estate (defined as “the value of all land and buildings on farms”), a category distinct from cropland. According to the survey, Texas investors saw their land rise in value at a whopping 9.1%, with the average acreage price rising from $2,090 last year to $2,280 this year.
The average American landholder didn’t perform as well as their Texas brethren, only seeing a 2% increase from 2017 values (from $3,080 to $3,140 an acre).
Texas land prices, in particular, have been fast-rising. Since 2014, cropland value has grown by more than 25% in the Lone Star State, with farm real estate value growing at 23%, and pastureland value increasing by close to 11%, according to USDA data.
In the past year, in fact, only two states outgunned Texas: Nebraska (8.6%) and Missouri (6.6%) in the pastureland category, and Missouri alone (10.4%), in farm real estate values. Texas was unmatched nationwide for its cropland value appreciation.
The greatest land-value losses went to Virginia’s pastureland (-3.3%), Kansas’s farm real estate (-2.7%), and Michigan’s cropland (-2.2%).
Since 2014, national pastureland prices have risen by nearly 7%; farm real estate prices have grown by 6.4%; and cropland prices have increased by less than three-fourths of a percent.
Bloomberg analyst Alan Bjerga, reporting on the recent study and news of a possible trade war with China, notes that “rising land values can help bolster farm balance sheets even if crop prices fall” due to a trade war. Bloomberg notes that most of the land in the U.S. is used as pastureland, first for cows, then for other animals, including sheep, goats, and horses.
The USDA report did not calculate land prices for Alaska or Hawaii or American Indian Reservation land.