"At Your Service" Newspaper Column

 

Michael R. Milam

Agronomy Specialist and County Program Director

For Daily Dunklin Democrat-At Your Service

November 07, 2007

Missouri Farm Land Values Opinion Survey-2007

            There has been a national trend in which urban sprawl had resulted in having less farm land available for crop production. As cities expand outward, they take rural areas such as wooded areas and cropland. The characteristics of urban sprawl include the conversion of cropland into housing developments, strip malls, fast food establishments, and shopping malls, and increased transportation infrastructure (roadways and airports).

            The subsequent loss of agricultural land resources has a major impact on the land values as non-agricultural purposes makes the land more valuable. Thus many absentee landowners will often sell land that has been in their family for years because they have no interest in returning to their rural roots. They can also make more money by selling to developers.

            With less land available there is also an increase in the value of the property. While we do not have very much animal based agriculture in Dunklin County, this has been a problem when the land is being surrounded by urban sprawl. The smell of the waste products will generate complaints from homeowners. A classic example of this is the Renewable Environmental Solutions plant in Carthage, Missouri. This plant is a rendering plant that takes turkey byproducts and put them under heat and high pressure to provide an alternative fuel and other marketable products. The problem is that this facility is located near the edge of town and the odor affects tourism.

            I grew up near a paper mill in North Central Louisiana. Back in the good days, even though we were over 20 miles away, we could smell the odor generated by this plant. When we asked residents who lived near the plant, how they could put up with the smell, they replied that to them it smelled like money since so many of the local people were employed by the plant. Most city dwellers are not as tolerant of agricultural and industry odors as they were fifty years ago.

            In the August 29, 2007 University of Missouri Extension Agricultural Economics Newsletter, Dr. Ron Plain and Joyce White reported the results of a Missouri Farm Land Values Opinion Survey that was conducted in July. Those who responded were lenders, rural appraisers, extension specialists, realtors, and related occupations.

            The responders were asked to estimate the value of good, average, and poor land. The classes included cropland, pasture, timberland, and hunting and recreation. 

            The values estimated in this survey exclude tracts smaller than 40 acres or farmland being priced on its developmental potential.

            General comments regarding this survey is that counties near the Mississippi River South of St. Louis and along the Missouri River north from Saline County averaged $3,000 or more per acre in July. Good cropland in all counties all of these counties along these rivers was valued above state average of $2,600 for good cropland.

            For Stoddard, New Madrid, Mississippi, Dunklin Counties, the average price for good cropland is $3295, $2134 for average, and 1785 for poor cropland. This is compared to the Missouri average of $2,600, $2,134, and $1661 for good, average, and poor cropland, respectively.

            There are reasons that SE Missouri cropland has high values. We have alluvial soils which mean that they are more productive than most of the states soils. These soils are flat and the filed sizes are larger which offers many advantages. For example, the cost of the Boll Weevil Eradication Program is much less in Missouri than in surrounding states due to the field sizes and having more cotton in a concentrated area.

            It appears that strong grain prices have sparked interest in cropland for its production potential. Realtors indicated that there were more people looking for good cropland than were willing to sell it. Respondents of the survey reported that there was an increased interest in all types of land by out-of area and foreign buyers.

            While there are restrictions on foreign investors, there is a dairy operation that will be starting in the New Madrid area that has managers from New Zealand as part of the operation. The Corporation is a domestic corporation but it has some foreign investors and managers. They like the business climate in Missouri, the longer growing season in Southeast Missouri and other variables that give them an advantage. The approximately 1,000 operation will have center pivots to irrigate the pastures and the animals will be grass-fed.

            An interesting statistic comes from the USDA/National Agricultural Statistics Service regarding national and regional land values. The average price of cropland in Missouri is $2,450 per acre. Compare this with Kansas and Arkansas at $1020, and $1,720, respectively. Iowa and Illinois have average cropland values of $3,650 and $4,460, respectively.

            While our land values are higher than several of our neighboring states and our southeast regional prices are higher, we still have a competitive advantage over Iowa and Illinois.

 

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