Ag Land Values Decrease Statewide On Average

 

 

From 1991 to 2015, agricultural land values in South Dakota, and in most other major agricultural production states, appreciated each year. In 2016 on average all agricultural use land decreased in South Dakota except rangeland, which will be discussed in a future article. This is the first annual decline in the average value of agricultural ground compared to yearly increases of 1.4 to 33.6 percent during 2011-2015 (Table 1). This indicates a change from the previous cycle of increases in agricultural land values.

 

 

 

 

 

The amount of land devoted to production agriculture in South Dakota is fixed and has changed little during the last 26-years. Figure 1 shows that regionally, the change in value varied from a 13.4 percent increase in the Northwest, to a 14.2 percent decrease in the Southwest. Many factors influence the demand for agricultural land in states such as South Dakota, such as interest rates, price expectations, and demand for commodities just to name a few.

 

 

 

 

There have been sharp declines in crop prices and returns in the past year. The drop in commodity prices from 2014 to 2016 may be a reason all South Dakota agricultural land values on average decreased 2.4% compared to a year ago (Table 1).