Linking the Price of Agricultural Land to Use Values and Amenities

14 Pages Posted: 15 Apr 2020

See all articles by Allison Borchers

Allison Borchers

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Jennifer Ifft

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Todd Kuethe

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Date Written: October 2014

Abstract

The recent appreciation in agricultural land values across the United States has raised a number of important questions for farmers, farmland owners, lenders, and policy makers. While traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns, previous research has shown that agricultural land values are actually driven by a complex set of factors. This study leverages the unique characteristics of a national land‐based USDA survey on farmland values and cash rents to estimate broad, national‐level determinants of the market value of cropland and pastureland. Our results support past research findings that indicate farmland values are only partially explained by agricultural returns. We find that multiple nonagricultural attributes of farmland also contribute to the market value.

Keywords: Cropland, farmland values, pasture

Suggested Citation

Borchers, Allison and Ifft, Jennifer and Kuethe, Todd, Linking the Price of Agricultural Land to Use Values and Amenities (October 2014). American Journal of Agricultural Economics, Vol. 96, Issue 5, pp. 1307-1320, 2014, Available at SSRN: https://ssrn.com/abstract=3574195 or http://dx.doi.org/10.1093/ajae/aau041

Allison Borchers (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
(202) 694-5548 (Phone)

Jennifer Ifft

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
(202) 694-5552 (Phone)

Todd Kuethe

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
(202) 694-5593 (Phone)

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