Farmland value increasing in area (Editorial)
The USDA’s annual Land Values Report released in August shows a small increase in the farm real estate average value in several northeastern states.
Delaware leads the region with a 6.4-percent increase from 2018, and while Maryland posted a more modest 2.5 percent increase from last year, it’s the state’s fourth straight year of increasing land value.
The gains may be encouraging, if for no other reason than to see the value of something on the farm increase at a consistent rate.
But at a time when there’s so much uncertainty and downward financial pressure on many areas of the agriculture industry, could it nudge some farmers closer to selling farmland?
We certainly hope not, and don’t think it will.
Looking at past USDA reports, average farm real estate values in 2004-05 had to take a much bigger leap — 40 percent in Delaware; 38 percent in Maryland and 22 percent in Virginia — to motivate many landowners to sell.
Values fell back to earth slightly in the years since, but still hover just below those historic highs.
Amidst years of falling on farm revenue, preservation programs in the region have helped farmers protect their most precious asset.
After 10 years, full funding was restored to the Maryland Agricultural Land Preservation Foundation in 2018 — and it returned to an annual application cycle, which allowed the foundation to increase the rate it is able to protect farmland.
In June, Delaware’s round of selection in its preservation program was the largest in state history, preserving 111 farms totaling 9,382 acres and raising its total preserved acres to a quarter of the state’s farmland.
Delaware also has fostered the Young Farmers Loan Program since 2011 to help lower barriers to young people wanting to acquire farmland.
Thirty-five farmers have purchased land so far in all three of the state’s counties, totaling 2,700 acres of farmland using $8 million in loans.
That includes both individual farmers and couples, all seeking to purchase new land or expand their existing farms.
Land that was purchased through the program is permanently preserved through the Delaware Agricultural Lands Preservation Foundation.
This year, the state agriculture department announced a rolling application process for the young farmer program to offer more flexibility.
“In the past, we asked that applicants apply by a specified date in the fall, but we realized this was restricting their opportunities to find the perfect farm when it came on the market,” said Deputy Secretary of Agriculture Austin Short. “This new rolling application system will allow a young farmer to apply when they secure the contract on the farm and have their application reviewed when they absolutely need it.”
As real estate, it’s an option farmers have, but hope not to use unless it’s absolutely necessary.
As farmland, it’s worth much more than the sale price.