Published on Wednesday, December 23, 2015 by Land Century
The Corn Belt
If youre after premium farmland, it doesnt get any better than the Corn Belt. This massive stretch of land spans from Nebraska to Missouri, Iowa, Illinois and Indiana. While all of these states offer attractive farmland and rising land values, there are some areas that are more lucrative than others.
Named the Cornhusker State for a reason, Nebraska is dominated by row crops. But this state is also an attractive option for farmers looking for small-scale production. The state offers a Nebraska Beginning Farmer Tax Credit Program that provides a 3-year land lease and $500 tax credit for farm start-ups.
Theres plenty of premium farmland in Nebraska, and many areas of the state are seeing increased land values. Farmland values in northern Nebraska are up 7% compared to last year, and land in the southwest is up 4%. Steer clear of the east, though, if value is your top concern. Farmland values have dropped 10% over the last year this portion of the state.
Iowa & Indiana
Over the last few years, farmland values in Indiana and Iowa have seen a significant decline. Why should you invest here? Because these two states are just coming off of a boom. Just a few years ago, farmland in Iowa and Indiana was astronomical. Now is a great time to buy in these two states as prices are beginning to come down. Naturally, these two states are excellent for corn farming, which can be highly profitable. But their flatland makes them great for growing other crops as well. You cant go wrong with investing in farmland in the heart of the Corn Belt.
The northeast is home to some excellent farmland, and values are higher than average because of the higher cost of living. But some areas are better than others.
The state of Vermont is known for its breathtaking fall foliage and abundance of farms. There are more than 245 farms in the state and plenty of CSAs to serve its small population of 626,000 people. Farmer support is strong in Vermont, and believe it or not, the cost per acre is below the national average ($2,800 vs. $2,900 nationally). Despite this, Vermont is a state you want to consider because it offers premium farmland and communities that prefer to buy from local farms. And land values are up 1.2% compared to 2014.
Outside the Big Apple, youll find plenty of land thats ideal for farming. Upstate New York is home to spectacular rolling pasturelands, and closer to the city, youll find smaller-scale urban farms.
New York is home to more than 700 farms and over 7 million acres of farmland. Its safe to say that youll have no problem finding large acreage for your farm operations. And the state offers a number of support programs to help farmers get their operations up and running. Farmland values are also rising rapidly in New York, up 11.1% over the last year. Right now, prices are at roughly $3,000 an acre, which is lower than neighboring states but still much higher than the previous year.
Although California is still facing a serious drought, the state produces a large percentage of our countrys food. With a temperate climate, the state offers ideal environmental conditions for growing a variety of crops and raising livestock.
But this land comes at a premium. Expect to pay over $7,000 an acre for farmland. And that price is rising each year. Compared to 2014, values are up 5.5%. California has more than 80,500 farms and produces nearly half of the vegetables, fruits and nuts in the U.S. The state also offers excellent support for farmers, with special programs that offer tax incentives and capital to help farmers get on their feet.
New Mexico may have the cheapest farmland in the country ($525 per acre on average), but land values are rising. Farmland is up 1.9% compared to last year. The only drawback to farming in New Mexico is that the desert-like climate presents many challenges. That said, the state offers numerous programs to help farmers start up their operations.
Oregon is home to more than 16,301,578 acres of farmland, and 35,439 operators. Just north of California, the state offers a great climate for growing a variety of crops. Farmland values are on the rise, too. Over the last year, the price per acre has increased 3.4% to $2,120. Cropland values are up 4%, too, at $2,600 per acre.
While prices are rising, the cost per acre is still lower than the national average and much lower than Californias cost per acre. Invest now while prices are low, so you can reap the rewards when farmland prices see a significant increase in the future.
Just north of Oregon, Washington is an excellent place to buy farmland. Values are up 8% from 2014, and cropland value is up 2.7%. There are over 14,748,107 acres of farmland in the state, and 37,249 operators. And youll pay much less per acre than you would in California, with current price averages of $2,700 per acre.
Farmland always has been and always will be an attractive investment because of its income-producing potential. Premium farmland offers higher yields and quality crops that fetch higher prices. If youre hoping to invest in farmland, these three key areas of the country offer attractive land opportunities and rising prices that will help you see a larger return on your investment.
While youll find some of the farmland in the Corn Belt, the northeast and the western area of the country also offers great farming opportunities, especially for small-scale farming operations.