Each year GreenStone Farm Credit Services compiles market and customer data to determine annual benchmark land values to be used in completing accurate and current appraisals based on regional sales data.
The benchmarks illustrate trends in the marketplace that can also help farmers evaluate business options. Regions reflected in the report cover the entire state of Michigan and northeast Wisconsin.
“This year’s report found prices for good farmland remained relatively stable throughout the territory,” says Joe Hickey, vice president and chief appraiser with GreenStone. “The Saginaw Valley area saw the largest decrease at 5.9 percent over 2018, with 80 acre parcels valued at an average of $480,000. Cropland in this area tends to be the most volatile due to the influence of sugar beet production, which we have seen range between $8,000 to $13,000 an acre over the past several years.”
The amount of ground that remained unplanted this season influenced this year’s report. Between acres left idle and late planting, overall productivity and ultimately profitability are unknown when the data was collected in June.
“The uneasiness of the crop year undoubtedly played into the buying activity and prices through the spring and summer. The variation in monthly transactions and regional differences is why we use annual averages to establish our market benchmarks in each area,” Hickey says.
Cropland in southern and southwest Michigan, the northern Thumb and western Northeast Wisconsin (NEWI) all showed no change in value over 2018. The areas of the southern Thumb, the Saginaw Valley and southeast NEWI marked decreases of -2.5 percent, -5.9 percent and -3.8 percent, respectfully.
The GreenStone analysis found dairy values for larger Michigan dairies remained unchanged at an average of $2,650 per stall and $6,000 per acre after a 5.5 percent decrease in 2018 over 2017.
Land used for recreation showed a slight increase of 2.8 percent over 2018 with an average price of $1,850 per acre in northern Michigan. Transition land, land between uses with the current use likely to change, in southeast Michigan posted an average of $8,100 per acre. In central NEWI the average price was $10,500 per acre. The large variance in value reflects the demand for non-farm land in each region.
“We will continue to monitor land values and other assets as we work to bring the most fair and equitable assessment for our customers” Hickey says. “As our customers continue to focus on what they do best – grow and sell crops – we will work to help them maximize their assets while remaining productive.”