Farm real estate values, a measurement of the value of all land and buildings on farms, averaged $2,100 per acre on January 1, 2009, down 3.2 percent from 2008, according to a new report from the U.S. Department of Agriculture's statistics service.
The report said decreasing livestock and crop prices and slower development of land due to the recession contributed to the drop in values. The 3.2 percent decrease from 2008 is the first decline in farm real estate value since 1987, USDA said.
As farmers struggle with lower commodity prices and higher costs caused by rising prices for fuel and fertilizer, the agricultural economy has become increasingly strained. Demand has fallen off for farm equipment and farmers have seen constraints in lending from banks.
USDA said cropland values declined by $110 per acre (3.9 percent) to $2,650 per acre on the whole, while in the Cornbelt region, the average cropland value decreased 4 percent from the previous year.
However, in the Northern Plains and Delta regions, cropland values rose 1.6 percent and 0.6 percent, respectively.
Regional changes in the average value of farm real estate ranged from virtually no change in the Northern and Southern Plains regions to an 11 percent decline in the Mountain region.
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