Land Values, Rents, Rent to Value Ratios and Land as an Investment

Damona DoyeSarkeys Distinguished ProfessorExtension Economist and Regents Professor

Roger SahsAssistant Extension Specialist

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Sources of data

• Land values– USDA National Ag Statistics Service annual summary– Agecon.okstate.edu/oklandvalues– Kansas City Federal Reserve Bank quarterly Ag Credit

Survey• Rental rates

– OSU survey results in CR-216 and CR-230– USDA NASS annual statistics– Oklahoma Commissioners of the Land Office

USDA-NASS data (August 2012)

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20120

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

US and OK Land Values

US Pasture Land Value OK Pasture Land ValueUS Cropland Value OK Non-irrig Cropland Value

$/ac

re

Farm Real Estate Value, 2012(% change)

7.4%

20.9%

4.0%22.8%

17.5%

26.5%

33.5%

19.2% 13.7%

23.9%

-1.1%

-2.4%

1.4% 26

-2.1%

-7.9%

9.1%

0.9%

11.3%

2.9%

6.4%

7.0%

12.0%

5

3.7%

11.50

N/C

> 20

10-19

1-9

<0

USDA-NASS data

13.6%

10.0%

5.0%

5.0%

2.9%

NC

9.6%

5.2%

3.4%

17.0%

10.4%

NC

NC

NC

8.2% -4.5%

-7.7%

-3.5%

-3.9%

NC

NC

2.75% -1.5%

-2.2%

Crop Land Average Value by State, 2012($ per acre)

USDA/NASS data

7,800

7,000

4,230

12,3804,000

4,050

4,4806,800

5,650

2,600

7,3005,000

3,3401,750

2,070

6,200

2,320

4,0003,450

1,350

4,700

3,430

2,300

5,730

2,520

3,360

2,120

8,500 2,370

1,690

1,390

853

2,560

1,450

1,290

2,690

1,830

2,230

2,510

9,810

3,500

N/A

500 - 999

1,000 – 2,499

2,500 – 4,999

5,000 – 15,000

Crop Land Cash Rent, 2012($ per acre)

USDA/NASS data

32.5

29.5

33

37.5

36

49

47

60.5

52

58

50.572.5

58.568

72

70.5

74

8789.5

76.5

79.594

91

98

108

103

99

115

130110

122130

215

151

143

142

176175

200

130

212

235

267

94.5

N/A

25 to 50

51 to 100

101 to 150

>151

USDA/NASS data

www.agecon.okstate.edu/oklandvalues

USDA/NASS data

19982000

20022004

20062008

20102012

0

200

400

600

800

1000

1200

1400

1600

$0

$5

$10

$15

$20

$25

$30

$35

OK Non-irrig Cropland Value OK Non-irrig Cropland Rent

Ave

rage

Cro

plan

d V

alue

($ p

er A

cre)

Average C

ropland Rent ($ per A

cre)

Year

OK Average Cropland Value and Rental Rates

Average Annual Dryland Cash Rental Rates ($/acre)

Source: OSU/NASS survey, fall 2012

NW SW NC E StateWheat31.78

28.6610-49

30.9615-55

38.2120-55

35.7020-67

32.8110-67

Alfalfa41.61

40.4032-50

Grain Sorghum27.90

29.0316-45

Northwest

Southwest

East

North central

Pasture Land Average Value by State, 2012

($ per acre)

2,6002,600

1,2502,5002,130

1,500

3,100

950

3,000

1,820

3,200660

490

590

2,4504,4003,580

4,1002,10013,500

1,550

4,300

4,200

2,8502,300

2,300

1,930

1,150

1,560

950

640

1,210

570

350

920

450

2,800

620

810

USDA/NASS data

N/A

500 - 999

1,000 – 2,499

2,500 – 4,999

5,000 – 15,000

Average Pastureland Rent, 2012($ per acre)

USDA/NASS data

34

24.50

3846

35

14

17.50

16.50 28

17.50

21

19

20 26

12.50

28

18

16

11.50

6.50

4.60

5.90

2.80

5

4.80

11.50

N/A

0 to 5

5 to 14

15 to 24

25 to 50

www.agecon.okstate.edu/oklandvalues

USDA/NASS data

19982000

20022004

20062008

20102012

0

200

400

600

800

1000

1200

1400

$0

$2

$4

$6

$8

$10

$12

$14

OK Pasture Land Value OK Pasture RentYear

Ave

rage

Pas

ture

Lan

d V

alue

($ p

er

Acr

e)

Average R

ent ($ per Acre)

OK Average Pasture Land Value and Rental Rate

http://agecon.okstate.edu/oklandvalues/

OK Pasture Land Values as a Percent of Cropland Values

Average Annual Pasture Cash Rental Rates ($/acre)

Source: OSU/NASS survey, fall 2012

NW SW NC E StateNative Pasture11.61

9.305-15

12.444-30

12.668-21

13.873-33

12.403-33

Bermuda16.61

17.366-35

18.994-50

19.274-50

Other Pasture16.10

23.098-50

21.6712-30

20.706-50

Northwest

Southwest

East

North central

USDA/NASS data

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20120

1

2

3

4

5

6

US Cropland Rent to Value OK Non-Irrig Cropland Rent to Value

US Pasture Rent to Value OK Pasture Rent to Value

Rent

to V

alue

US and OK Cropland and Pasture Rent to Value Ratios

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Value of $1000 Invested in OK Pasture-land, Cropland or the S&P

Pastureland S&P Cropland

19701972

19741976

19781980

19821984

19861988

19901992

19941996

19982000

20022004

20062008

20102012

0%

50%

100%

150%

200%

250%

300%

Value of an Investment Made in Oklahoma Farm-land as a Percent of an Investment in the S&P by

Initial Year of Investment

Pastureland Cropland

ww

w.a

geco

n.ok

stat

e.ed

u/ok

land

valu

es

http://agecon.okstate.edu/oklandvalues/

2009-2011 Cropland and Pasture Values by Size of Tract