Farmland values in Delmarva contrast to rest of U.S.

Staff Reporter

(Sept. 16) Delmarva farm values remained fairly stagnant from 2013 to 2014 as values across the country, most notably in the Midwest, soared.
Farm real estate value dropped by 0.4 percent in Maryland and increased by 0.2 percent in Virginia and 0.1 percent in Delaware respectively, according to data released by the USDA’s National Agriculture Statistics Service.
Nationally, the real estate value of farmland, including buildings, has surged, on average, from about $1,500 per acre in 2005 to nearly $3,000 an acre in 2014. The average increase was more than 8 percent. Delmarva farmland is traditionally worth much more than that, however. Delaware’s average value per acre was $8,180 this year. Maryland’s is $6,900.
But farmland in South Dakota jumped nearly 23 percent to $2,070 per acre. North Dakota and Kansas land values increased by more than 17 percent.
“Farmland has always been higher [in Delmarva] than other parts of the country,” said Valerie Connelly, executive director of the Maryland Farm Bureau. “Sounds like we’ve plateaued some while other parts have caught up. ... The breadbasket probably had higher land values because of the value of the crop.”
Farmland prices typically mimic the price of commodities, said USDA officials who spoke with The Delmarva Farmer.
But grain prices have tumbled recently after a years-long rally of record highs.
Corn is currently priced around $3.39 per bushel, down from a mid-2012 high of more than $8.
Soybeans are down to $10.71 per bushel from a high of more than $17 in mid-2012. A Reuters report from last week said Midwestern farmers accumulated enough wealth during those boom years to invest in land and keep its value up despite plummeting grain prices.
Government regulation could be a factor in lagging value growth in the Delmarva region, Connelly said.
In Maryland, the septic bill, passed in 2012, strictly limits development in rural regions in every county statewide, and farmers in those areas said there farms are worth less because of it.
USDA’s data on farmland real estate value is based on farmer surveys, not market data or county government value estimations.
But the number of crops on Maryland and Delmarva farms could also lead to more stable values, Connelly said. 
“We have a lot of diversified farms, so they’re not tied to commodity prices,” she said.