Increased productivity was not always enough to keep the farmer and rancher in business toward the end of the 20th century. Economic realities in the farm sector required operators to manage resources such as land and water more efficiently, and to market their products more effectively.
In 2000, the average value of agricultural land and buildings was $1,050 per acre, 52 times greater than the average of $20 per acre in 1900. Land values climbed through most of the century, and saw only a few periods of decline. The first decline began in 1920 when agricultural land values averaged $69 per acre. While many industries were thriving in the 1920's, farm prices dropped due to huge agricultural surpluses, causing agricultural commodity prices and land values to drop steadily throughout the 1920's. Agricultural land values saw the largest percentage declines of the century in the early 1930's, the beginning of the Great Depression. Agricultural land values dropped 37 percent over a period of 3 years and remained between $30 and $33 per acre throughout the 1930's. Following the Great Depression, land values were revitalized and began a climb that continued until the early 1980's.
The 1970's showed the largest percentage increase in agricultural land values. In 1970 the average value was $197 and increased to an average value of $737 by 1980, a yearly average increase of more than 10 percent. The climb in land values was primarily due to strong farm prices, expanding trade, high inflation, and speculation that land values would continue to rise. However, in the mid-1980's, farm prices dropped due to surpluses, inflation slowed, and demand for agricultural land decreased. These factors caused the second large decline of agricultural land values during the century. Land values dropped from $801 in 1984 to $599 in 1987, a decline of 25 percent. This sharp drop caused a great deal of hardship in the agricultural community. Many farmers and ranchers who had taken on large amounts of debt, based on inflated land values, were not able to continue operating. Agricultural land values have steadily increased since 1987 to the current average U.S. value of $1,050 per acre.
Last modified: 08/11/09