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Minn. cropland values, cash rents rise sharply in 2011

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Willmar, 56201
Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

WILLMAR -- According to the U.S. Department of Agriculture, Minnesota cropland values and average cash rental rates continued their strong and steady climb upward in 2011.

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According to USDA's National Agricultural Statistics Service, average cropland values in Minnesota increased by 13.5 percent in 2011, to an average of $3,200 per acre, up from $2,820 per acre in 2010.

Average cropland values in the United States increased by 9.4 percent in 2011, to an average of $3,030 per acre, up from $2,770 per acre in 2010.

In the Northern Plains and Corn Belt regions, average cropland values increased 17.2 and 16 percent, respectively. However, cropland values in the Northeast and Southeast regions decreased by 1.3 and 1.1 percent, respectively.

The cropland value estimates provided by USDA are based primarily on surveys conducted during the first two weeks of June.

Average cash rental rates for Minnesota cropland continued their long-term upward trend, increasing by an average of 11.6 percent, to an average price of $135 per acre, up from $121 per acre in 2010.

The 2011 average cash rental rates for Illinois and Indiana cropland are $183 and $152 per acre, respectively.

The three states with the highest per acre average cash rental rates in 2011 were: California - $268; Hawaii - $197; and Iowa - $196.

Ethanol demand has increased U.S. corn acreage by 10 percent in the last decade

During the last decade, annual ethanol production in the United States has increased by 9 billion gallons, the vast majority of which has been produced from corn.

To meet the increased demand created by the ethanol industry, corn acreage in the U.S. has increased by roughly 10 percent, or 7.2 million acres, between the years 2000 and 2009. However, much of the increase occurred during the years 2006 to 2008.

It should also be noted that the increase in U.S. corn production between the years of 2000 and 2009 was partly the result of an increase in corn acreage relative to historic levels, but also due to an increase in corn yields.

Researchers from the U.S. Department of Agriculture's Economic Research Service recently studied how farmers adjust their land use decisions in response to price changes for certain commodities.

The researchers found that land use decisions are typically made by considering current crop price expectations, along with the relative productivity of available farmland planted to specific crops.

The study found that farms specializing in soybeans in 2006 accounted for most of the increase in corn acreage between the years of 2006 and 2008. In addition, farmers shifted other crops into soybeans to help offset the shift from soybeans to corn.

Another finding was that expanding the total acreage devoted to cultivated crops on corn and soybean farms also increased corn and soybean acreage.

The average shift from hay, Conservation Reserve Program acres or grazing land into cultivated cropland accounted for about a third of the average increase in harvested cropland acreage, with most of the increase in acreage coming from hay.

Double cropping and a reduction in idle cropland also expanded the number of acres devoted to cultivated crops.

Latest farm worker survey results released

According to USDA's National Agricultural Statistics Service, there were 74,000 hired workers on farms in the Lake Region during the week of July 10-16. The Lake Region includes the states of Minnesota, Michigan and Wisconsin.

Farm operators paid their hired workers an average wage of $10.75 per hour during the survey week, down 35 cents from last July.

The number of hours worked averaged 36.7 for hired workers during the survey week, compared with 34.4 hours one year ago.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.

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