|2008 MT Farm Real Estate Values Escalate
Montana agriculture in 2008: Still the state’s leading industry
Pat Hansen for the Ag Digest
Agriculture remains Montana’s leading industry, generating an average of $2 billion annually in cash receipts, according to the Montana Department of Agriculture.
Nearly three-fourths of cash receipts for Montana producers come from wheat and livestock.
The value-added sector is a growing segment of Montana’s agriculture industry. Some of the value-added products listed on the Made in Montana Web site include bread, cereal, pancake mixes, pasta, cooking oils, bakery products, snack bars, processed cuts of beef, bison, lamb and pork, jerky, sausages, bacon, hams, tamales, pasties, pizzas, ice cream, cheese, yogurt, jams, syrups, candies, salsas, soup mixes, herbal teas, wines, beers and ales, bees wax candles and soaps, lip balms and lotions, wool products and emu products.
Demand for organic foods continues to grow in the United States and around the world. According to a new report, organic meat supply shortages and price hikes are expected to continue. Organic grains and flour, mushrooms, beef, lamb, dairy products, salsas, mint and wild medicinal herb products are among products produced in Montana.
Ron de Yong, director of the Montana Department of Agriculture, believes bio-products offer exciting possibilities and the prospect of new crop diversification. “Clustering new development of feed oilseed or ethanol byproducts at nearby dairies and feedlots while growing those industries and adding value through food processing is just one idea that holds great potential in Montana,” he writes.
He added, “It would be better if we could keep more of the value of beef and wheat in Montana, rather than losing so much of it to high transportation costs and food processors located outside our borders.”
Montana Farms and Ranches
Montana ranks second in the nation for the amount of land used for farm and ranch production — 59.7 million acres.
Nationwide, 1.5 million acres of agricultural land was lost last year.
The number of acres of agricultural land in Montana converted to urban/rural development continues to increase significantly, as each year an average of 1
5,780 acres of agricultural land is converted to developed uses; of this 13,800 acres are prime rural land.
American producers have fed the people of this nation and the world for more than 100 years, but today they are facing incredible challenges.
A nation that cannot feed its people and must rely on imported food is at the mercy of those who produce it. We are seeing the effects of that today as the price of oil escalates.
Each producer’s decision to retain the land in agriculture or sell it for development will have a tremendous impact on future generations of Americans.
Yet, land values have increased so much that young people who want to be producers can no longer afford to purchase it and still make a living.
Farm Real Estate Values Escalate
According to Montana Ag Statistics, the value of non-irrigated cropland increased $100 to $730 per acre in 2007, compared with 2006. The value of irrigated cropland was $3,700, an increase of $900 from 2006. Pasture values increased $200 to $850 per acre.
Montana farm real estate values have been steadily increasing, and have more than doubled in the past three years.
In 2001 the average value of all farmlands was $350/acre and in 2006 it was $760/acre. Non-irrigated cropland was worth $355 in 2001, $370 in 2003 and $730 in 2007. Irrigated cropland was valued at $1,470 in 2001, $1,580 in 2003 and $3,700 in 2007. Pastureland more than tripled in value during the past five years from $240/acre to $850/acre.
The increase in farm real estate values is attributed to nonagricultural factors, including relative low interest rates and strong demand for nonagricultural land uses. Demand for farm real estate as an investment continues to be a strong market influence.