High production costs didn’t stand in the way of a profitable year for farmers in 2022. High farm income was the driving force behind North Dakota cropland values sharply rising in 2023.
North Dakota State University Extension ag finance specialist Bryon Parman says the average value per acre in North Dakota for 2023 is $2,863. While farmers are battling input costs, cropland values going up will also be another additional expense, as Parman warns rent prices will be rising along with the value. The current state average for cash rent on cropland is $79.90 per acre.
“Rents are starting to go up considerably. And I think that’s probably going to continue for the next few years. We’re gonna see cash rent start catching up with the increases in land prices,” he said.
The biggest increase in land values was in the east-central and southern Red River Valley regions, with both increasing over 20%, whereas the region that saw the smallest amount of value increase was southwestern North Dakota.
Pastureland values also increased in the state by 17.1% — the largest increase in pastureland in over a decade. Pasture rent went up to 7.1% according to Parman. The southwestern part of the state saw the highest increase.
ADVERTISEMENT
One of the possibilities for pastureland values and rents rising along with it are high input prices. In an effort to cut down feed costs, some ranchers and cattle producers turned to renting out pastureland.
“Pastureland rents are low in terms of dollars per acre compared to cropland values, so a $1 or $2 per acre change in the data can have a significant impact on the percentage changes, such as the northwestern region, which went from $10 per acre to $12 per acre,” Parman said in a news release. “Therefore, the percentage changes in rental rates should be viewed with caution. However, the fact that pasture rents were up across the board and accompany a large increase in pastureland values, it is a justified conclusion that pasture land rents are increasing in North Dakota.”
The highest pastureland rent was the southeastern region of the state, sitting at $34 an acre, while the least costly was in northwest North Dakota.
The Trust Project
