A.J. Brannstrom, University of Wisconsin Center for Dairy Profitability
(A link to the full report is at the end of this brief summary.)
Ag land values up 5% in 2014. High milk prices and low interest rates combined to drive Wisconsin agricultural land prices higher again in 2014. While there is great variation in valuation from one sale to another, the WI Department of Revenue transfer return data confirms that agricultural land values have increased in most of the state.
The average price of agricultural land sold in Wisconsin in 2014 reached $3,935. This was a 5% increase from 2013. The total acres sold declined by 5% and the number of sales were down by 8%. Strong dairy prices and low interest rates helped to create new record highs. Prospects for 2015 are less clear.
Farmland is the most valuable asset on any farmers’ balance sheet. However, estimating land values is always difficult. There is nothing more unique than an individual parcel of land. While many thousand homes are sold each year, only a small fraction of the state’s agricultural land changes hands on the open market in any given year.
Surveys of farmers, bankers, realtors and appraisers are sometimes used to estimate changes in land values. While easy to conduct, these opinion surveys can be hard to interpret. News of high priced sales travels quickly – but these sales are often the exceptions and not reflective of the market.
Fortunately, the Wisconsin Department of Revenue (DOR) collects an alternative source of agricultural land sales data. A transfer return tax is collected each time a property is sold, and a transfer return form is collected with the tax. Information from these transfer return forms is the source for this paper.
Wisconsin’s agricultural land values are low compared to some of our highly productive neighboring states – but a larger portion of our land is not suitable for continuous row crop farming and more of our land is used for forage production, woodlots and pasture. The shorter growing season in northern Wisconsin also limits the potential agricultural value of the land. Continue to read the full article, click below…
Click here to view the full report, Wisconsin Agricultural Land Prices 2009-2014