Others than farmers drive up US land prices

On average, an acre of land in the US costs $3.800 (approximately €9.393 per hectare). That's an increase of $420 per acre (approximately $1.037 per hectare), or 12,4%, from the previous survey from the USDA's National Agricultural Statistics Service. The price of arable land averages $5.050 per acre (approximately €12.482 per hectare). That is an increase of 14,3% compared to last year. The price of grassland stands at $1.650 per acre (approximately €4.078 per hectare).

Shrinking margins
The relatively high grain prices are an important factor that has driven up the price of land. The sharply increased costs in agriculture may put a brake on further increases in the price of agricultural land. High prices for fertilizer, fuel and animal feed, among other things, are putting a heavy burden on the operating results of farmers in the US. In the Agbarometer of Purdue University, the expectation of a price increase in both the short term and the long term has dropped somewhat among participating American farmers. It is striking that farmers who indicate that the land price will increase in the long term, expect that this increase will be due to the interest of parties outside agriculture. Six in ten respondents cited land purchases by non-agricultural investors as the main reason for a higher land price.

Rental and rental prices will also rise further, as a significant number of participants in the Agbarometer expect. 40% of farmers with corn and soy in the crop plan expect rents to rise next year. Opinions in that group are divided about how much the rent will increase. 27% expect the increase to be limited to 5% for 2023 compared to 2022, while 34% expect a price increase of 10% or more. However, the largest group, namely 39%, expects an increase of between 5 and 10%.