North Dakota Cropland Values Make Double Digit Gains While Rents Increase Modestly

Apr 18, 2022

Sustained high commodity prices have pushed cropland prices higher across North Dakota, increasing 10.9% from 2021 to 2022. However, the statewide cash rental rate increase was much lower at approximately 3.1%, says Bryon Parman, North Dakota State University Extension agricultural finance specialist.

The 2021 survey conducted by the North Dakota Department of Trust Lands found online at www.land.nd.gov/resources/north-dakota-county-rents-prices-annual-survey showed rents had increased only 0.77% from 2020 to 2021 and land values were up 1.74% during the same time period. In fact, from 2015 though 2021, rents and values across North Dakota had mostly remained flat, or even declined to some degree, when inflation adjustments were made to the yearly reported rates, says Parman.

“The highest increase in land values statewide from 2015 to 2021 was only 1.74% with 2015, 2016, 2017 and 2018 all showing small declines in statewide average land values,” Parman adds. “We have to go back to 2014, where land prices increased 8.5%, to find an increase as high as that shown from 2021 to 2022.”

Statewide cropland rental rates were reluctant to increase at the same rate as values. With rates increasing 3.1%, we need only go back to the period from 2018 to 2019 to find a comparable increase where during that period, statewide average rates increased 3.61%, he adds.

With significant decreases in rental rates in 2016 and 2018 and a slight decrease in 2020, the 3.1% increase from 2021 to 2022 essentially helps hold rates steady statewide over the last seven years. If accounting for inflation, rental rates in “real dollars” have declined somewhat compared to where they were in 2015.

With respect to land values, six NDSU Extension regions saw double-digit gains in land values. The highest regional increase for 2022 occurred in the southeast where land values increased 22.25%. The next highest was the east-central region, increasing 17.22%. The northwest, northeast and southwest regions all increased between 11% and 12%. The north-central, north Red River Valley and south Red River Valley all increased between 6% and 7% while the south-central NDSU region increased the least at nearly 5%.

The south Red River Valley remains the most expensive farmland at $4,521 per acre on average. The second most expensive regions remain the southeastern NDSU Extension region and the north Red River Valley region. The least expensive regions remain the northwest region and the north-central NDSU Extension regions.

Rental rate increases were much smaller with three NDSU regions near or below a 0% increase and no regions increasing more than 5%. The largest increase in cash rents occurred in the north-central, southwest and southeast regions, all increasing nearly 5%. The south-central and south Red River Valley regions both increased approximately 3.5% while the northeast increased 2.85%. However, the north Red River Valley increased only 0.6% while the east-central did not increase at all. The northwest actually decreased 1.1%, Parman says.

The highest cropland rental rates remain in the south Red River Valley region at an average of $132.80 per acre with the southeast and the north Red River Valley coming in second and third at $99.30 and $92.60 per acre, respectively. The lowest rates remain in the northwest at $34.60 per acre and the southwest at $38.90 per acre. The remaining regions sit between about $54 per acre (north-central) and nearly $70 per acre (east-central).

“While high commodity prices and perhaps inflation appear to have driven up the price of farmland, it also appears that high production costs and possibly the ability to secure new or used equipment has muted an increase in rental rates,” Parman says. “Indeed, low interest rates, and strong net farm incomes in 2020 and especially 2021 have encouraged farmers to pay more for farmland coming on the market.”

Parman concludes, “Land buyers also have the equity and time component on their side and are willing to overlook high production costs for a year or so. However, potential renters must focus on what is going on this year, and there appears to be a reluctance to pay significantly more in cash rents than was paid from 2020 to 2021. Additionally, 2022 will be following a drought over much of North Dakota, limiting the appetite for paying higher rents. However, the 2021 drought doesn’t appear to have been strong enough to negate the impact of high commodity prices and low interest rates impact on land values.”

Source : ndsu.edu

Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”