High-priced sales make good headlines however, there were very few sales above $10,000/acre (8% of all transactions) (see figure 2). Leaving about half of the sales between $2600 and $6000. Seventeen percent of the sales are less than $2600/acre and 36% of sales had prices above $6,000/acre. While the state average has increased in the first half of 2022 there is wide variation in the sales price per acre. The shorter growing season in northern Wisconsin also limits the potential agricultural value of the land. This is due to the fact that a large portion of our land is not suitable for continuous row crop farming and is used for forage production, woodlots, and pasture. Wisconsin’s agricultural land values are low compared to some of our highly productive neighboring states. Data from these transfer return forms are used in this paper. A transfer return tax is collected when a property is sold, and a transfer return form is collected with the tax payment. The Wisconsin Department of Revenue (DOR) collects an alternative source of agricultural land sales data. News of high-priced sales travels quickly – but these sales are often the exception and are not reflective of the market. While easy to conduct, these opinion surveys are subjective and can be hard to interpret. Surveys of farmers, bankers, real estate professionals and appraisers are sometimes used to estimate changes in land values. While many thousands of homes are sold each year, only a small fraction of the state’s agricultural land changes hands on the open market in any given year. Each individual parcel of land is unique. However, estimating land values is always difficult. There is a possibility that this increase in prices is also due to the stimulus payments farmers received in 2020, 2021, and the first quarter of 2022.įarmland is the most valuable asset on most farmer’s balance sheet. This increase may be due to the increase in corn and bean prices. 2Īlthough we saw signs of weakening demand in 20, land prices increased in 2021 and are continuing to rise in 2022. Therefore, returns to land in the last five years are comparable to other low-risk investments such as low-risk corporate bonds which averaged 3.5% over that period. Adding the capital gains of 1% to a rental income of about 3.25% 1 gave Wisconsin land owners an average annual return on investment of 4.25% for the 2015-2021 period. In comparison, between 20 the average annual growth in value was 4.0%. In some areas, other factors such as urban sprawl have helped to maintain or even bring up land values.īetween 20 the average annual growth in Wisconsin agricultural land value was 2.75%. Thus, limiting the supply of land on the market which helped support market values. Most could continue cropping or renting the land. The vast majority of landowners, even those forced to exit the dairy industry, were not forced to sell their land. Despite the difficult economic conditions and substantial losses in the number of dairy farms over the last few years, the land market has been supported by the ability of landowners to hold onto their property and limit the supply of land on the market. There are marked differences in sale prices across the state with some regions faring better than others. Average price of agricultural land sold in Wisconsin and the number of sales each year from 2010-2022 There were nearly 14% more acres sold and 7.5% more sales in 2021 compared to 2020. This is an 8.8% increase from 2021 and a 21.6% increase from 2020. The average price of agricultural land sold in Wisconsin between January and July 1 st, 2022, was $5,416 per acre (see figure 1). 2022 Mid-Year Report State-level overview
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