North Dakota Cropland Values Surge for Third Straight Year, Defying Income Trends

North Dakota cropland values continue a surprising upward trajectory, marking a third consecutive year of double-digit percentage increases, according to a recent survey. The state’s cropland values jumped 11.59% moving from $2,863 per acre to $3,174 per acre heading into the 2024 spring season.

This sustained growth comes on the heels of increases of 10.92% and 13.46% in 2022 and 2023. This trend has caught some experts off guard, as Bryon Parman, an agricultural finance specialist at North Dakota State University Extension, notes: “A jump in land values…that large is a bit surprising given the decline in net farm incomes from 2022 to 2023, and the U.S. Department of Agriculture’s projected decline from 2023 to 2024.”

Despite the rise in land values, corresponding increases in cash rental rates for cropland have remained modest, seeing increases of between 3.12% and 6.82% over the same period. The statewide average cash rental rate increased to $78.70 per acre, up from $75.90 per acre.

The North Dakota Department of Trust Lands Annual Land Survey provides the basis for these figures. Regionally, the largest increases in land prices were found in the north-central and south-central areas of the state, both surpassing a 20% increase.

Parman adds context, noting that the last time North Dakota experienced rapid cropland value appreciation, from 2008 to 2013, prices and rental rates subsequently remained flat for a seven-year period from 2014 to 2020. Whether this current upward swing will be followed by a similar period of stagnation remains to be seen.