Land values are up in South Dakota

Land values are up in South Dakota Agricultural land values statewide in South Dakota jumped 17.1 percent from 2003 to 2004, and the increase exceeded 20 percent in the northeast, east-central and south- central regions.

The smallest increase was 8.6 percent in the northwest.

The statewide increase is considerably more than the annual increases of 9 to 10 percent reported in the previous three years.

Those are among the highlights of a new publication by South Dakota State University agricultural economists who track land trends. The 2004 SDSU South Dakota Farm Real Estate Survey is written by SDSU ag economics professor Larry Janssen, SDSU graduate student researcher Erik Gerlach, and SDSU Extension Farm Financial Management Specialist Burton Pflueger. The study is available online at

Here are more highlights of the report:

* Statewide, cropland and rangeland per-acre values have doubled since 1995. During the same period, statewide per-acre average cash rental rates increased 67 percent for cropland and 52 percent for rangeland.

* Reasons for the increases in land values and rental rates are sharp declines in farm mortgage interest rates since 2001; provisions of the 1996 and 2002 farm bills, including the level of crop subsidies and removal of planting restrictions; and general economic conditions of low inflation rates.

* Cash rental rates per acre for cropland and rangeland/ pasture increased in all regions from 2003 to 2004. The increases in cash rental rates for cropland varied from less than $1 per acre in the west to between $4 and $5 an acre in the south-central and eastern regions of South Dakota.

* The average value of non-irrigated agricultural land as of February 2004 in South Dakota is $527 per acre. Regionally, the value of non-irrigated ag land varies from $1,163 per acre in east-central counties to $189 per acre in the northwest.

* Average non-irrigated cropland values vary from $1,346 per acre in the east-central region to $705 per acre in central South Dakota to $294 per acre in the northwest.

* This is the third year that average cropland values are more than $1,000 per acre in east-central and southeastern South Dakota.

* Average cropland values are more than $1,650 per acre in several counties in eastern South Dakota. Average rangeland values stand at $764 per acre in the southeast, compared to $167 per acre in the northwest.

* 2004 cash rental rates for non-irrigated cropland are $100 per acre in some counties in east-central South Dakota, compared to $21-$23 in the west. Average rangeland rental rates range from almost $45 per acre in some southeastern counties to $7.90 per acre in the northwest.

* Average rates of return are lower in 2004 than at any time since the SDSU survey started in 1991. Respondents estimated net rates of return to farmland in their localities at 4.3 percent for all agricultural land, 4.9 percent for non-irrigated cropland, and 3.9 percent for rangeland.

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