How Much Does Land Cost In Kentucky?
The United States Department of Agriculture (USDA) published a PDF version of the 2020 Land Values Summary on Thursday, August 6th. This yearly report provides information on the typical worth of all land and structures on farms in the United States, broken down by state and area.
- Farm real estate value, cropland value, and pasture value are the three components that are evaluated and compared.
- At the national level, each of these three categories remained the same as they were in 2019, with an average real estate value of $3,160/acre.
- The average value of an acre of cropland was $4,100, and the value of an acre of pasture was $1,400.
The state of Kentucky had an increase in the average value of all three categories from 2018 to 2019. The value of real estate in Kentucky rose by 2.6% from the previous year, reaching an average of $3,920 per acre. The value of farmland in Kentucky averaged $4,400 per acre, a rise of 2.3% from 2019, while the value of pastureland was $3,060 per acre, an increase of 0.7%.
- In spite of low commodity prices, the value of farmland continues to demonstrate remarkable resiliency.
- This is significant from a monetary perspective due to the fact that land and buildings make up 83% of the asset side of the national agricultural balance sheet.
- The decline in land values that occurred in the 1980s would have a negative impact on the financial viability of farms.
It is important to keep in mind that the figures that are shown in this report are “averages” and that they should be understood as such. The productivity of the land, the amount of development pressure on the property, the amount of demand from local residents, and a variety of other characteristics are all variables that influence local land values.
These averages are helpful for identifying larger trends, but in the end, the value of land is always determined by its “local” market. This link will take you to the most recent version of the Land Values Summary, which is published every August. Author(s) Steve Isaacs is an extension professor at the University of Kentucky.
His email address is [email protected]
How much is an acre of land in Ky?
The United States Department of Agriculture (USDA) published a PDF version of the 2020 Land Values Summary on Thursday, August 6th. This yearly report provides information on the typical worth of all land and structures on farms in the United States, broken down by state and area.
Farm real estate value, cropland value, and pasture value are the three components that are evaluated and compared. At the national level, each of these three categories remained the same as they were in 2019, with an average real estate value of $3,160/acre. The average value of an acre of cropland was $4,100, and the value of an acre of pasture was $1,400.
The state of Kentucky had an increase in the average value of all three categories from 2018 to 2019. The value of real estate in Kentucky rose by 2.6% from the previous year, reaching an average of $3,920 per acre. The value of farmland in Kentucky averaged $4,400 per acre, a rise of 2.3% from 2019, while the value of pastureland was $3,060 per acre, an increase of 0.7%.
In spite of low commodity prices, the value of farmland continues to demonstrate remarkable resiliency. This is significant from a monetary perspective due to the fact that land and buildings make up 83% of the asset side of the national agricultural balance sheet. The decline in land values that occurred in the 1980s would have a negative impact on the financial stability of farms.
It is important to keep in mind that the figures that are shown in this report are “averages” and that they should be understood as such. The productivity of the land, the amount of development pressure on the property, the amount of demand from local residents, and a variety of other characteristics are all variables that influence local land values.
These averages are helpful for identifying larger trends, but in the end, the value of land is always determined by its “local” market. This link will take you to the most recent version of the Land Values Summary, which is published every August. Author(s) Steve Isaacs is an extension professor at the University of Kentucky.
His email address is [email protected]
Is land a good investment 2022?
Skip to content Reading Time: 6 minutes The ideas of purchasing property and making financial investments in land are not understood in the proper context. The vast majority of individuals are woefully ignorant regarding the steps involved in purchasing land.
- It should come as no surprise that purchasing property for investment purposes is a prudent strategic move that investors are obligated to do in order to diversify their portfolios.
- Surprisingly, a significant number of people do not consider land while making financial investments.
- You might be curious in whether or not purchasing land will be a profitable investment in 2022.
The short answer is that the answer is YES! If an investor wants to diversify their portfolio and generate significant returns, they need to consider purchasing property. Of course, this choice is not appropriate for everyone. You should educate yourself on land investing because it is an essential real estate investment.
When considered as a potential investment, land may be a blessing since it provides investors with the option to diversify their portfolios and greater returns at lesser risk. A common kind of real estate investment is home flipping, in addition to other forms of real estate investing. Therefore, you must be considering making an investment in it.
After becoming aware of several common misunderstandings regarding the advantages that financial investments in property may provide, we have made the decision to shed some light on some intriguing facts. The following are six startling facts that will help you understand why purchasing land in 2022 is a rewarding investment and will convince you to purchase land as an investment.
Why you should buy land?
Your Takeaway on the Many Reasons Why Purchasing Land Constitutes a Profitable Investment – It’s not just the wealthy and renowned, like the Rockefellers and Kiyosakis of the world, who can profit from investing in real estate; everyone can do it too! You have done yourself a tremendous service by giving yourself the opportunity to educate yourself and get an understanding of why purchasing property is such a great investment.
Land is a resource that is both tangible and limited, and it can be bought and sold rather easily. Land is the most cost-effective kind of real estate to hold over the long term since it does not require any upkeep and is less expensive than other aspects of real estate. You won’t have to put in any extra effort to maintain ownership of the land, giving you more time to relax.
This particular real estate submarket has a low level of competition and is simply waiting for you to enter it. I work with you to assist you in locating and purchasing land within your price range at Compass Land USA. The entire transaction may be carried out online, where we also provide a streamlined and uncomplicated shopping experience.
How much does an acre of land cost in Georgia 2022?
The Dat –
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | Five Year Avg. |
|---|---|---|---|---|---|---|
| USDA Co Avg. Yield | 216 | 204 | 190 | 189 | 191 | 198 |
| USDA Avg Price Received Corn | $3.55 | $3.42 | $3.50 | $3.74 | $3.47 | $3.54 |
| Est. Gross Revenue | $765.38 | $698.02 | $666.05 | $706.11 | $663.46 | $699.81 |
| USDA Co Avg. Rent | $249 | $243 | $263.50 | $284 | $262 | $260 |
| USDA Cash Rent as a % of est. gross | 32.53% | 34.81% | 39.56% | 40.22% | 39.49% | 37.32% |
| Rent @ 37% Est. Gross Revenue | $283 | $258 | $246 | $261 | $245 | $259 |
There were no USDA statistics available for the year 2018. This figure represents the combined totals for 2017 and 2019. After applying our research strategy to the data, we discovered the following: The average rent per acre in USDA counties has been $260 per year during the past five years on average.
The predicted gross has a five-year average of around $700.00 per acre. The cash rent as a percentage of the expected gross has a five-year average of being less than 37 percent. Using data provided by the USDA, we were able to deduce an important piece of information from this exercise: the percentage of predicted total revenue that comes from farmland cash rent is 37% in Dekalb county.
In the case of maize, the cash rent as a percentage of gross is often in the region of 30–38 percent. We notice a low of 30% and a high of 40% throughout the course of those five years, with three out of the five years coming in over 38%, which implies that those years were likely lower margin years for the farmer.
| Year | 2021 |
|---|---|
| USDA Co Avg. Yield | ? |
| USDA Avg. Price Received (YTD) | $5.48 |
| Est. Gross Revenue | ? |
| USDA Co Avg. Rent | $258 |
| USDA Cash Rent as a % of est. gross | ? |
Because we are lacking statistics for the USDA county average yield, we are unable to calculate an expected gross income. This will prohibit us from doing so. The table may, however, be finished for 2021 if, as a stand-in, we use the five-year average of the USDA corn yields for Dekalb.
| Year | 2021 |
|---|---|
| USDA Co 5 yr. Avg. Yield | 198 |
| USDA Avg. Price Received (YTD) | $5.48 |
| Est. Gross Revenue | $1,085.04 |
| USDA Co Avg. Rent | $258 |
| USDA Cash Rent as a % of est. gross | 23.78% |
| Rent @ 37% Est. Gross Revenue | $401.46 |
If we were to update the first chart with the data from 2021, it would look somewhat like this:
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | Six Year Avg. |
|---|---|---|---|---|---|---|---|
| USDA Co Avg. Yield | 216 | 204 | 190 | 189 | 191 | 198 | 198 |
| USDA Avg Price Received | $3.55 | $3.42 | $3.50 | $3.74 | $3.47 | $5.48 | $3.86 |
| Est. Gross Revenue | $765.38 | $698.02 | $666.05 | $706.11 | $663.46 | $1,085.04 | $764.01 |
| USDA Co Avg. Rent | $249 | $243 | $263.50 | $284 | $262 | $258 | $260 |
| USDA Cash Rent as a % of est. gross | 32.53% | 34.81% | 39.56% | 40.22% | 39.49% | 23.78% | 35.07% |
| Rent @ 37% Est. Gross Revenue | $283 | $258 | $246 | $261 | $245 | $401.46 | $283 |
Let’s take a look at how the year 2021 affects the statistics and how it stacks up against the years that came before it: The cash rent that the USDA will pay as a percentage of the expected gross in 2021 is just 23%, which is 9% less than the previous low that was reached over this period of five years. 
The first question that a great many of people are going to have is whether or not this indicates that we should anticipate a 53 percent rise in farm cash rent. The simple answer to that question is no. We can be confident that an adjustment is on the horizon based on the data because we see estimated gross revenue surging and we see that in 2021 the ratio of farmland cash rent as a percent of estimated gross revenue will be at 23%, which is significantly lower than the previous five year low of 32%.
To what extent, then, should a landowner anticipate making adjustments? What can we expect to find? When we look ahead to the year 2022, commodity prices have remained high, and a large number of farmers have been given the option to enter into forward contracts for grain at prices that are higher than $5.
As a result of the fact that the majority of people are now planning their budgets based on prices at $5 or higher, whereas in the past the majority of people planned their expenses and rent based on prices ranging from $3.50 to $3.75, we anticipate that the estimated gross revenue in 2022 will be closer to 2021 than it was in any of the previous five years.
The excellent news is as follows. On the other hand, the same inflation that has helped boost commodity prices has also had an influence on the pricing of inputs, most notably fertilizer. These infographics on the cost of fertilizer assist to put such rises into perspective: There is widespread belief that the costs of seeds and other agricultural equipment will likewise rise.
Keeping all of above in mind, how much money would an acre of land cost in the year 2022? Let’s take a look at the numbers again: If we compare the 5-year average rent computed at 37% of expected gross income to the 6-year average, we find that the 5-year average rent is $259/acre, while the 6-year average rent is $283/acre.
This is a difference of 9%. If, for the year 2021, we compute rent based on 30% of the projected gross instead of 37% of the estimated gross, the cash rent as a percentage of the estimated gross would be $325 per acre. This represents an increase of almost 25%. We decided on thirty percent since, as was said before, our cash rentals typically range from thirty to thirty-eight percent of our gross income, and this would put us back into that range.
It seems reasonable to begin with these two numbers as a point of reference. Given the rise in total income, even a decrease of 9% in growth appears plausible at this point. A rise of 25 percent in only one year is an ambitious goal that seems unlikely.
Imagine that the cost of any aspect of your company rose by 25% over the course of a single year. The vast majority of farmers will be hesitant to agree to a 25% rise in their cash rent because they are aware that, historically speaking, once cash rents have increased, they have been difficult to decrease again, even when commodity prices have decreased.
This is observable by looking at the ratio of estimated gross revenue to farmland cash rents over the course of the five years. They began at a very reasonable 32%, but as gross revenue dropped, rents did not, resulting in a peak ratio of 40%. This is observable by looking at the ratio of estimated gross revenue to farmland cash rents over the course of the five years.
| Year | 2010 | 2011 | 2012 | 2013 | 2014 | Five Year Avg. |
|---|---|---|---|---|---|---|
| USDA Co Avg. Rent | $189 | $216 | $237 | $240 | $278 | $232 |
| YoY Growth | 14.29% | 9.72% | 1.27% | 15.83% | 10.28% |
The most significant year-over-year rise that occurred during this time period was 16%. Continue our examination, shall we? What will happen if we additionally bring in yield and price data throughout the course of this period and look at the ratio of cash rent as a percent of predicted gross?
| Year | 2010 | 2011 | 2012 | 2013 | 2014 | Five Year Avg. |
|---|---|---|---|---|---|---|
| USDA Co Avg. Yield | 180.4 | 183.8 | 159.3 | 193.8 | 194.1 | 182.28 |
| USDA Price Received Mkt. Year | $3.85 | $6.14 | $6.71 | $6.12 | $4.10 | $5.38 |
| Est. Gross Revenue | $694.54 | $1,128.53 | $1,068.90 | $1,186.06 | $795.81 | $974.77 |
| USDA Co Avg. Rent | $189 | $216 | $237 | $240 | $278 | $232 |
| YoY Growth | 14.29% | 9.72% | 1.27% | 15.83% | 10.28% | |
| USDA Cash Rent as a % of est. gross | 27.21% | 19.14% | 22.17% | 20.24% | 34.93% | 24.74% |
| Rent @ 25% Est. Gross Revenue | $173.64 | $282.13 | $267.23 | $296.51 | $198.95 | $243.69 |
| YoY Growth | 62.49% | -5.28% | 10.96% | -32.90% | 8.81% |
A few intriguing considerations are as follows: The percentage of USDA cash rent to predicted total revenue has been far lower over the entirety of the time, and it is significantly lower than the 30–38 percent that has been recorded more recently. Between the years 2010 and 2011, the year-over-year growth of rent as a percentage of anticipated gross grew by 62%.
If you recall, the growth in our numbers between the years 2020 and 2021 was 53% on a year-over-year basis. It would appear that a time of two years is a good benchmark to use for comparison. Even after taking into account the substantial decreases in the expected gross revenue, cash rent has been steadily increasing.
An great illustration of how USDA county average rentals are a lagging signal is provided by the fact that the most substantial year-over-year rise occurred in 2014, even though anticipated gross income decreased. After looking at the data from this time period, it is unreasonable to anticipate that the rent would go up by 25% this year.
- This data also reveals that the previous time there was a boom in the price of commodities, cash rent as a percentage of expected gross income went below the barrier of 30%.
- However, this threshold was eventually reset when commodity prices fell and cash rentals continued to rise.
- In conclusion, after looking at evidence from more recent times as well as data from further back in history, a more reasonable projection for farm cash rent increases this coming year is between 9 and 14 percent.
In addition, if the price of commodities continues to rise until the year 2022, past trends would seem to indicate that rents will continue to go up until the predicted gross revenue ratio and cash rent fall back into the range of 30–38 percent. To get back to the topic that was asked in the beginning, what is a competitive farm cash rent range for the year 2022 in Dekalb County? A multiplier ranging between 1.09 and 1.14 corresponds to an increase of 9-14%.
| DeKalb County 2022 Rent Projections | |
|---|---|
| USDA | $281-$294/acre |
| Professionally Managed | $337-$353/acre |
img class=’aligncenter wp-image-189362 size-full’ src=’http://www.eddyvillemall.com/wp-content/uploads/2022/09/kaduluraepusaeno.jpg’ alt=’How Much Does Land Cost In Kentucky’ /> Remember that good farms with competent operators will rent for more than the average, and certain farms this year will surpass $400/acre in Dekalb county, but in terms of averages, we feel that the range that was provided above is a reasonable range based on current and historical statistics. 