Purdue: AgEcon: Programs & Publications: Programs: PAER

The June 2003 Purdue Land Values Survey found that on a statewide basis bare Indiana cropland ranged in value from $1,966 to $3,035. These values are based on 323 surveys received from professionals that are knowledgeable of Indiana's farmland market. Poor land had an estimated value of $1,966 per acre, average land had an estimated value of $2,509 per acre, and top land had an estimated value of $3,035 per acre (Table 1). For the 12month period ending in June 2003, this was an increase of 5.2%, 5.3% and 4.9%, respectively for poor, average, and top land.

Part the difference in land values reflects productivity differences. As a measure of productivity, survey respondents were asked to estimate longterm corn yields. The average reported yield was 103, 134, and 163 bushels per acre, respectively for poor, average, and top quality land. The value per bushel for different land qualities was very similar. Poor land was the most expensive at $19.07 per bushel. Top land had the lowest value at $18.59 per bushel and average land was $18.79 per bushel.

The average value of transition land*increased this year, reversing the decline that occurred in last year's survey. The average value of transition land in June 2003 was $6,936 per acre, an increase of 7.6% from June 2002. Due to the wide variation in estimates for transitional land, the median value** may give a more meaningful picture than the arithmetic average. The median value of transitional land in June 2003 was $5,500 per acre.

Cash rents increased statewide from 2002 to 2003 by $2 to $4 per acre (Table 2). The estimated cash rent was $147 per acre on top land, $120 per acre on average land, and $93 per acre on poor land. This was an increase in rental rates of 2.2% for poor land, 3.4% for average land, and 2.8% for top land. Rent per bushel of estimated corn yield was $0.90 per bushel for all land classes. Cash rent as a percentage of value continued to decline. For top and average farmland, cash rent as a percentage of farmland value was 4.8%. For poor farmland, cash rent as a percentage of farmland was 4.7%. These values are the lowest achieved in 27 year history of the Purdue Land Value Survey.

Changes in the value of farmland in the six different geographic areas of Indiana (Figure 1) for December 2002 to June 2003 ranged from a 2.1% increase for poor land in the Central region to a 4.5% increase for average land in the Southwest region (Table 1). All regions of the state reported strong increases in farmland values for this sixmonth period. The strongest region was the Southwest with increases ranging from 3.4% to 4.5%.

For the year ending June 2003, the change in land values ranged from a decline of 8.4% for poor land in the Southwest region to an increase of 11.7% for average land in the Southeast region. In the Southwest region, the increase in value during the six month period from December 2002 to June 2003 was not sufficient to offset earlier reductions. All classes of land in this region declined for the year ending June 2003. The strongest increases for the year were in the Southeast region, ranging from 7.6% to 11.7%. This was followed by the North region with increases ranging from 7.8% to 9.7%.

The highest valued topquality land was in the Central area, $3,336 per acre. This region was followed by West Central ($3,053), North ($3,037), Northeast ($2,888), Southwest ($2,811), and Southeast ($2,710).

Land value per bushel of estimated average corn yield (land value divided by bushels) is the highest in the Central region, ranging from $20.01 to $21.64 per bushel. This was followed by the North, Northeast and West Central with values ranging from $18.04 to $18.81. The Southwest had the lowest land value per bushel, ranging from $13.55 to $16.87. This region also had the widest range of values.

Respondents were asked to estimate the value of rural home sites with no accessible gas line or city utilities and located on a black top or wellmaintained gravel road. The median*** value for fiveacre home sites ranged from $5,000 to $8,500 per acre (Table 3). Estimated per acre median values of the larger tracts (10 acres) ranged from $4,750 to $7,500 per acre.

Table 3. Median value of five-acre home sites and home sites of ten acres or more
	Median value, $ per acre
	5 Acres or less for home site				10 Acres & over for subdivision
Area	2000 $/A	2001 $/A	2002 $/A	2003 $/A	2000 $/A	2001 $/A	2002 $/A	2003 $/A
North	5,000	5,250	6,000	6,000	5,000	5,000	5,000	5,000
Northeast	5,000	5,000	5,000	6,000	4,500	4,500	4,500	5,000
West Central	5,000	5,000	5,800	6,000	5,000	5,000	5,000	5,000
Central	6,000	6,250	7,000	8,500	5,500	5,000	5,750	7,500
Southwest	5,000	6,000	5,000	5,000	5,000	6,000	5,000	5,000
Southeast	5,000	5,000	5,500	6,000	4,000	4,000	5,000	4,750

Area Cash Rents

All areas of the state reported increases in cash rent (Table 2). Only the Central and Southwest region reported a decline in cash rent. In both regions, the cash rent for poor land declined. The strongest increase in cash rent occurred in the Southeast region.

Table 2. Average estimated Indiana cash rent per acre, (tillable, bare land) 2002 and 2003, Purdue Land Value Survey, June 2003
			Rent/Acre		Change	Rent/bu. of Corn		Rent as % of June Land Value
Area	Land Class	Corn bu/A	2002 $/A	2003 $/A	'02-'03 %	2002 $/bu.	2003 $/bu.	2002 %	2003 %
North	Top	162	141	143	1.4%	0.88	0.88	5.3	4.7
	Average	130	113	115	1.8%	0.88	0.88	5.2	4.8
	Poor	100	88	91	3.4%	0.90	0.91	5.3	4.9
Northeast	Top	160	132	138	4.5%	0.82	0.86	4.9	4.8
	Average	128	104	106	1.9%	0.81	0.83	4.9	4.5
	Poor	97	81	82	1.2%	0.82	0.84	4.9	4.5
W. Central	Top	166	154	158	2.6%	0.96	0.95	5.3	5.2
	Average	138	131	134	2.3%	0.98	0.97	5.5	5.2
	Poor	108	103	106	2.9%	0.97	0.98	5.6	5.2
Central	Top	167	156	158	1.3%	0.94	0.95	4.9	4.7
	Average	138

August 2003

Indiana Farmland Values & Cash Rents Continue to Increase