COOPERATIVE EXTENSION SERVICE • UNIVERSITY OF KENTUCKY COLLEGE OF AGRICULTURE, LEXINGTON, KY, 40546
AEC-97
Land Value and Cash Rent Survey
Greg Halich and Karen Pulliam, Agricultural Economics
I
n January 2012, Agriculture and
Natural Resource (ANR) agents were
surveyed to estimate land values and
rental rates for various types of farmland.
A total of 68 ANR agents completed this
survey out of 120 counties, representing
57 percent of the state. These responses
were distributed between the three
geographic regions as follows: Western
Kentucky (23), Central Kentucky (27),
and Eastern Kentucky (18). These regions
were further divided into eight subregions based on similar land attributes
(Map 1). This document summarizes
the results from the agent survey. Dollar
values are rounded to the nearest $5-$10
for rental rates and $100 for land values.
Certain points should be noted as
to the validity of this survey and how it
should be interpreted. First, the responses are the best estimates of the responding ANR agents. Thus a certain amount
of estimation error should be expected in
this data. Second, the reported figures in
this document are averages of the county
estimates aggregated at the region and
subregion level, not at the county level.
Some counties in each subregion will
Results
have average land values or rents lower
or higher than the stated subregion average. Note also that individual farms
within a county may have land values
or rental rates considerably higher or
lower than the average figure. So these
figures are not intended to represent
ranges of individual farms or tracts of
land. They are simply averages for each
region or subregion. Actual land values
and rental rates of individual farmland
will be influenced heavily by productivity,
accessibility, competition, and distance
to markets. Third, the validity of these
figures decreases as we move from region
to subregion. In particular, subregions
with few responses should be used with
caution. Also, because the responding
counties change from year to year, the
resulting averages may be influenced by
the change in respondents—particularly
around the urban areas of Lexington and
Louisville, where development or amenity value may have more impact than
actual farmland value on prices.
Land values varied considerably more
than cash rents, because the development value far exceeds the farm value in
urbanized counties while cash rents will
typically reflect the value for agricultural
purposes. The Bluegrass and North Central subregions around Lexington and
Louisville had similar to slightly higher
land values than Western Kentucky but
had much lower rental rates on cropland.
Average cropland values at the subregion
level ranged from $2,200 to $4,900 per
acre; hay ground ranged from $1,800
to $4,200 per acre; pasture ranged from
$1,600 to $3,800 per acre; and woodland
ranged from $1,100 to $2,700 per acre. In
all cases, the South East subregion had
the lowest values and the North Central
subregion had the highest values. Average subregion cropland rent ranged from
$80 to $180 per acre; tobacco ground rent
(with a curing barn) ranged from $90 to
$430 per acre; hay rent ranged from $45
to $60 per acre; and pasture rent ranged
from $30 to $60 per acre.
Map 1. Kentucky Counties by Region.
Central Region (27)
North Central
Bluegrass
South Central
Gallatin
ble
Trim
Oldham
Carroll
Grant
Marshall
Hickman
Fulton
Calloway
Ed
Hart
mo
Butler
Barren
Simpson
Allen
Monroe
Fra
nk
li
Pulaski
Adair
Pike
Owsley
Perry
Clay
on
Logan
Todd
Jackson
Laurel
Leslie
Martin
Floyd
Breathitt
Rockcastle
ns
Warren
Christian
Trigg
Green
n
offi
Graves
erg
lfe
tca
Carlisle
nb
Me
Lyon
n
hle
ell
cke
ldw
Cra
n
sto
Mc
Ca
ing
Ballard
Mu
Lee
rd
Casey
Lawrence
Johnson
Wolfe
Estill
rra
Lincoln
Taylor
Elliot
Menifee Morgan
Powell
Madison
Boyd
g
Ma
Liv
Hopkins
Ga
y
n
Crittenden
Marion
Larue
Grayson
Boyle
Carter
Rowan
Bath
er
ea
cL
Ohio
Mercer
Clark
m
M
Webster
Hardin
Washington
Fayette
Greenup
Lewis
o
tg
Union
Nelson
Breckinridge
n
erso
And
on
Daviess
de
Spencer
ine
Henderson
ck
nco
Ha
North East
South East
Bullitt
ea
Bourbon
M
M
Mason
Robertson
Nic
hola Fleming
s
Scott
sam
Jes
d
Woodfor
Eastern Region (18)
Bracken
Harrison
Henry
Shelby
Jefferson
Pendleton
Owen
n
Far West
Mid West
Near West
Boone
ell
pb
m
Ca
Kenton
Western Region (23)
Knott
Letcher
Russell
Knox
Cumberland
Clinton
Wayne
McCreary
Whitley
Harlan
Bell
Numbers beside each region represent the number of completed surveys.
Agriculture and Natural Resources • Family and Consumer Sciences • 4-H Youth Development • Community and Economic Development
EXTENSION
Map 2. Average cropland value
(per acre) by subregion.
$4,900
Map 3. Average hay-ground
value (per acre) by subregion.
$2,700
$4,400
$3,000
$3,600
$4,700
$4,200
$2,200
$3,700
$2,400
$2,200
$2,700
$3,100
$4,300
$1,800
$3,600
Survey Changes from October
2010 to January 20121
Table 1. Regional Land Values in Kentucky.
Region
Cropland
Hay
Pasture
Woodland
Cropland values increased in the three
Western subregions and in South Central
Kentucky by $600 to $900 per acre, which
was roughly a 20 percent increase. On the
other hand, cropland values decreased
significantly in the Bluegrass and NorthCentral subregions, by $1,100 and $1,400
per acre, respectively. Hay ground and
pasture values were down in almost all
of the Central and Eastern regions on
average. The Western subregions showed
increases in land values for hay ground
and pasture of $400 to $1,000 per acre.
Woodland values were down or largely
unchanged throughout the state except
the Far West subregion, which had a $500
per acre increase.
Cash rents were largely unchanged
for hay and pasture ground except in
the South Central and North Central
subregions which showed $15 to $30
per-acre increases. For cropland, however, all subregions except the South East
Western
$4,100
$3,000
$2,700
$2,000
Central
$4,300
$3,500
$3,000
$2,200
Eastern
$2,400
$1,900
$1,700
$1,300
1 The changes noted here are based on 41
counties that responded to both the 2010
and 2012 surveys. This method was used in
an attempt to remove potential response
biases by providing a consistent baseline in
the two surveys.
Map 4. Average pasture value
(per acre) by subregion.
$3,800
Per-acre value based on January 2012 survey of Agriculture and Natural Resource County Extension
Agents. Total of 68 completed surveys.
showed significant increases in cash rent,
ranging from $20 to $60 per acre. These
changes were larger than the increases
seen from the previous two surveys on
cropland cash rent. Although the agent
survey did not specifically ask about rents
on individual tracts, reports in the last
year again indicated dramatic increases
in maximum rents on individual tracts,
especially in the South Central subregion.
Land values in the Bluegrass and North
Central subregions decreased $100 to
$1,400 per acre, with the majority in the
$600 to $1,100 range. The reason these
two regions had such dramatic decreases
in land values is probably due to:
• Their proximity to the urban influences of Lexington, Louisville, and
Cincinnati, which tends to price farm
and forestland above their production value, thus having more room for
downward movement
• Problems with the horse industry that
have led to the sale of many of these
farms
Table 2. Regional Cash Rents in Kentucky.
Region
Cropland
Tobaccoa
Hay
Pasture
Western
$160
$320/$270
$55
$50
Central
$130
$310/$230
$55
$40
Eastern
$90
$230/$170
$45
$35
Per-acre rental rate based on January 2012 survey of Agriculture and Natural Resource County
Extension Agents. Total of 68 completed surveys.
a Tobacco rent with/without curing barn.
Map 5. Average woodland
value (per acre) by subregion.
$1,900
$2,800
$2,200
$1,600
$2,400
$3,300
$1,900
$2,700
$1,500
$1,600
$2,000
$3,500
$2,600
2
$1,600
$1,100
Map 6. Average cash rent
cropland (per acre) by
subregion.
$110
Map 7. Average
$270/180
cash rent tobacco
$270/210
(per acre) by
subregion.
$110
$120
$140
$160
$180
$80
$330/250
$310/210
$320/270
$150
$360/280
$90/50
$430/390
Other dynamics driving the land value
and rental changes are likely due to the
following:
• Record profitability in the corn and
soybean sector in the last few years
has resulted in increased demand for
cropland. This demand may explain
why, in general, the Western region
that grows the bulk of the corn and
soybeans in the state experienced a
dramatic increase in land values (except
woodland) and an increase in cropland
rental rates. A number of agents in the
Western region noted that much of
the hay ground and pasture sold in the
last two years was being converted to
cropland. Land values for hay ground
and pasture increased in the Western
region and did not in the other regions.
• A decrease in disposable income
caused by the prolonged recession
and more difficulty in obtaining credit
has resulted in decreased demand
for recreational-type land and hobby
farms. This decreased demand would
explain the widespread decreases in
woodland, hay, and pasture values in
the Central and Eastern regions.
• Poor profitability in the cow/calf sector until the last year and generally
decreasing cow numbers resulted in
reduced demand for hay and pasture
ground. Demand would be expected to
change if calf prices remain strong for
a prolonged period and cattle farmers
look to expand operations.
Map 8. Average cash rent hay
(per acre) by subregion.
Table 3. Subregional Land Values in Kentucky.
Subregion
Cropland
Hay
Pasture
Woodland
Far West
$4,300
$3,600
$3,500
$2,600
Mid West
$4,700
$3,100
$2,800
$2,000
Near West
$3,000
$2,400
$1,900
$1,500
South Central
$3,600
$2,700
$2,200
$1,600
Bluegrass
$4,400
$3,700
$3,300
$2,400
North Central
$4,900
$4,200
$3,800
$2,700
North East
$2,700
$2,200
$1,900
$1,600
South East
$2,200
$1,800
$1,600
$1,100
Per-acre value based on January 2012 survey of Agriculture and Natural Resource County Extension
Agents. Total of 68 completed surveys.
Table 4. Subregional Cash Rents in Kentucky.
Cropland
Tobaccoa
Hay
Pasture
Far West
$150
$430/$390
$60
$60
Mid West
$180
$320/$270
$50
$45
Near West
$140
$270/$210
$50
$40
South Central
$160
$310/$210
$55
$45
Bluegrass
$120
$360/$280
$50
$35
North Central
$110
$270/$180
$65
$45
North East
$110
$330/$250
$50
$30
South East
$80
$90/$50
$45
$40
Sub-Region
Per-acre rental rate based on January 2012 survey of Agriculture and Natural Resource County
Extension Agents. Total of 68 completed surveys.
a Tobacco rent with/without curing barn.
Map 9. Average cash rent
pasture (per acre) by subregion.
$65
$50
$50
$50
$50
$55
$45
$30
$35
$40
$45
$45
$60
$60
3
$45
$40
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