Farmland Values Drop

After going up for 21 consecutive years - farmland prices dropped this year. Experts say this trend is reflective of the recession. At the start of 2009 - the value of all land and buildings on farms averaged 21-hundred dollars an acre - down 3.2-percent from a year earlier. In its annual report - USDA said prices in Corn Belt states fell 2.2-percent to $3,620 an acre. In Montana - they plunged 22-percent to 700-dollars. In comparison - home prices in cities were down 19-percent last year and led to a 35-percent plunge in commercial values from an October 2007 peak.

The Department of Agriculture reported that Northeast states were the most expensive of the 10 regions in the lower 48 states with an average price of $4,830 an acre. The least-expensive area was the Mountain states at $922 an acre. Even after the declines - the value of U.S. farmland - excluding Alaska and Hawaii - was the second-highest on record - above the $2,010 mark of 2007.

Jeff Conrad at Hancock Agricultural Investment Group in Boston is optimistic. He sees farmland starting to pick up and judges it may return 10-percent a year as the recession eases. Conrad adds population, more Western-style diets and land availability all point toward more growth.

Jason Henderson - a Vice President with the Federal Reserve Bank of Kansas City - says rural property values fell less than city prices because farmers’ debt loads are the lowest in the last 50 years. USDA forecasts the ratio of debt to assets will be 9.1-percent this year - less than half the levels seen at the peak of the 1980s farm crisis.