By Scout Nelson
North Dakota pastureland values have increased for the fourth consecutive year, according to Bryon Parman, North Dakota State University (NDSU) Extension agricultural finance specialist. From 2023 to 2024, statewide average pastureland values rose 6.63%, from $1,273 per acre to $1,355 per acre. This marks the fourth straight year of increases since 2021, with an average annual rise of 6.9% during this period.
Pastureland cash rental rates in North Dakota increased by over 4% in 2024, reaching an average of just over $23 per acre. The data is based on the North Dakota Department of Trust Lands Annual Land Survey, which is weighted by county acreage count and categorized into NDSU Extension regions.
The data does not include values for the southern Red River Valley, northern Red River Valley, or Northeast regions due to low reported rates or sales values.
Much like cropland prices in North Dakota, pastureland values have grown significantly faster than cash rental rates. From 2014 through 2024, statewide pastureland prices increased at an annual rate of about 5%. In contrast, pastureland rental rates grew at around 2.2% per year, less than half the rate of value increases.
“As of 2024, the rent-to-value rate for pastureland, calculated by dividing the cash rental rate by the land value, was down to 1.7%,” says Parman. “This means that before accounting for management fees or property taxes, the return to pastureland in North Dakota is 1.7%. When these factors are considered, the return is significantly lower. Historically, in 1990, the rent-to-value for pastureland was approximately 7%, showing that over the last 35 years, pastureland values have greatly outpaced rental rates.”
Parman explains that pastureland prices and rental rates are influenced by cattle prices, similar to cropland prices. Pastureland prices are influenced by various factors, such as drought damage, cattle sales, regionalization, and rising cropland prices.
For example, droughts can damage pastureland for years, and areas with more cattle command higher rents. Rising cropland prices can also increase pastureland prices, even if livestock prices are not favorable.
Parman predicts that pastureland values in North Dakota will continue to rise due to favorable spring conditions and strong beef cattle prices. If beef cattle prices persist and inventories increase from their historical low in 2024, rental rate increases could pick up in the coming years.
Photo Credit -gettyimages-jacqueline-nix
Categories: North Dakota, Business