THE U.S. farm real estate value — a measure of the value of all land and buildings on farms — averaged $3,020 per acre for 2015, up 2.4% from 2014 values (Figure), according to newly released U.S. Department of Agriculture data.

Regional changes in the average value of farm real estate ranged from a 6.1% increase in the southern Plains region to a 0.3% decrease in the Corn Belt region. The highest farm real estate values were in the Corn Belt region, at $6,350 per acre, while the lowest values were in the Mountain region, at $1,100 per acre.

The U.S. cropland value increased $30 per acre (0.7%) from the previous year to $4,130 per acre. The average cropland value increased 9.2% from the previous year in the southern Plains but decreased 2.3% in the Corn Belt.

On a state-by-state basis, the USDA data showed that Iowa had the biggest decline over the last year, with cropland prices dropping from $8,750 to $8,200 acre, while Texas had the largest increase, rising from $1,680 to $1,840 per acre.

The U.S. pasture value increased to $1,330 per acre, or 2.3% above 2014. The Lake States region had the highest increase, at 15.4%. The Southeast region was unchanged from 2014.

Expenditures

While agricultural real estate remains at record levels, farmers are also spending more on production.

The latest USDA "Farm Production Expenditures" report showed that U.S. farmers spent $397.6 billion on agricultural production in 2014, an 8.3% increase from 2013 and the largest increase since 2008.

Expenditures for feed, farm services, labor and livestock/poultry and related expenses all saw increases from 2013.

USDA reported that crop farm expenditures decreased 2.1% to $202.2 billion in 2014, while livestock farm expenditures increased 21.5% to $195.4 billion.

The largest expenditures for crop farms were rent and farm services — both at $26.8 billion (13.3% of the total) — labor at $24.1 billion (11.9%) and fertilizer, lime and soil conditioners at $23.2 billion (11.5%). Combined crop inputs (chemicals, fertilizers and seeds) totaled $56.2 billion, accounting for 27.8% of total crop farm expenses.

The largest expenditures for livestock farms were feed at $62.1 billion (31.8% of the total), livestock/poultry and related expenses at $42.8 billion (21.9%) and farm services at $18.5 billion (9.5%). Together, these line items accounted for 63.2% of total livestock farm expenses.

The report shows that U.S. farm operations spent, on average, $30,680 on feed, $21,818 on farm services, $21,722 on livestock/poultry and related expenses and $16,472 on labor in 2014, compared with spending an average of $29,779 on feed, $18,612 on farm services, $16,321 on livestock/poultry and related expenses and $15,271 on labor in 2013.

Total fuel expenses were $16.7 billion. Diesel, the largest subcomponent, was $10.6 billion, accounting for 63.5% of total expenses. However, this was 2.8% lower than the previous year. Gasoline expenses were $3.1 billion, a 3.3% increase from the prior year.

Volume:87 Issue:31