MONROE - Farmland values in Wisconsin are remaining stable despite their decline throughout the Midwest.
According to a November report from the Federal Reserve Bank of Chicago, the average value of farmland in Illinois, Iowa and Michigan has fallen since late 2015, with Michigan's values decreasing by 11 percent.
The same report, however, shows that Wisconsin's farmland values have increased by 2 percent for the same period, the highest growth in the region.
Mark Mayer, Green County agriculture agent, said the reason for Wisconsin's stability is the diversity of the state's agriculture.
"We have a lot of dairies in Wisconsin," Mayer said. "And dairy never saw the same high spike as other industries when the commodity prices went up, so it's not going down now that commodities are falling."
Ted Bay, crops and farm management agent for Lafayette and Grant counties, agreed, adding that one of the primary crops for much of the Midwest is grain, the price of which has been decreasing since 2013.
"Because of that, the competition for land for grain is going down, so the price is also going down," Bay said. "But in Wisconsin, we have a lot of livestock production - dairies, in other words - and because there are more interests there is more competition."
According to preliminary data from the Wisconsin Department of Revenue, Green County saw 21 sales of agricultural land in 2016, representing 1,732 total acres sold. The average value per bare acre of that land is estimated at $4,881.
This estimate is a slight decrease from 2015, which saw 2,121 acres sold in Green County for an average price of $5,117.
Estimates for Lafayette County in 2016 have not yet been disclosed, but in 2015, that county saw 1,409 acres sold for an average of $5,114 per acre.
A report for the University of Wisconsin Center for Dairy Profitability reported the average price per acre for farmland in Wisconsin was $3,833 in 2015. More than 90,800 acres were sold in Wisconsin that year.
By comparison, the average land value in Illinois in 2016 was $7,450 per acre.
According to the Center for Dairy Profitability's report, 2012 saw a farmland boom, with 136,658 acres being sold statewide that year for an average of $3,610 per acre. That number has dropped each year since then.
Glenn Marass, agricultural lender at the Bank of Brodhead, said the value of land in Green County averaged at approximately $3,000 per acre 10 years ago.
"There are have highs and lows, of course, but the value of land has gone as high as $8,000 to $10,000 recently," Marass said.
Marass added that since farmland is still seen as a good investment in Wisconsin, many buyers take advantage of Section 1031 of the Internal Revenue Code, which allows investors to defer capital gains taxes after the sale of certain properties.
"A lot of crop farmers around here are just more well-heeled than others," said Scott Vosters, agricultural lender at the Bank of New Glarus.
Dean Havens, agricultural lender at the Woodford State Bank, said the vast majority of agricultural land sold in Green County remains as farmland.
"There was a spell before the housing crisis when people were buying up land to be subdivided, but that doesn't happen much anymore," Havens said. Bay said the same is true of Lafayette County.
Mayer said there were approximately 379,520 acres of farmland in Green County in 2016, a number which has not fluctuated significantly for years.
Bay was unable to provide an estimate for the total acreage of farmland in Lafayette County, although data from the U.S. Department of Agriculture suggests numbers well in excess of 230,080 acres.
According to a November report from the Federal Reserve Bank of Chicago, the average value of farmland in Illinois, Iowa and Michigan has fallen since late 2015, with Michigan's values decreasing by 11 percent.
The same report, however, shows that Wisconsin's farmland values have increased by 2 percent for the same period, the highest growth in the region.
Mark Mayer, Green County agriculture agent, said the reason for Wisconsin's stability is the diversity of the state's agriculture.
"We have a lot of dairies in Wisconsin," Mayer said. "And dairy never saw the same high spike as other industries when the commodity prices went up, so it's not going down now that commodities are falling."
Ted Bay, crops and farm management agent for Lafayette and Grant counties, agreed, adding that one of the primary crops for much of the Midwest is grain, the price of which has been decreasing since 2013.
"Because of that, the competition for land for grain is going down, so the price is also going down," Bay said. "But in Wisconsin, we have a lot of livestock production - dairies, in other words - and because there are more interests there is more competition."
According to preliminary data from the Wisconsin Department of Revenue, Green County saw 21 sales of agricultural land in 2016, representing 1,732 total acres sold. The average value per bare acre of that land is estimated at $4,881.
This estimate is a slight decrease from 2015, which saw 2,121 acres sold in Green County for an average price of $5,117.
Estimates for Lafayette County in 2016 have not yet been disclosed, but in 2015, that county saw 1,409 acres sold for an average of $5,114 per acre.
A report for the University of Wisconsin Center for Dairy Profitability reported the average price per acre for farmland in Wisconsin was $3,833 in 2015. More than 90,800 acres were sold in Wisconsin that year.
By comparison, the average land value in Illinois in 2016 was $7,450 per acre.
According to the Center for Dairy Profitability's report, 2012 saw a farmland boom, with 136,658 acres being sold statewide that year for an average of $3,610 per acre. That number has dropped each year since then.
Glenn Marass, agricultural lender at the Bank of Brodhead, said the value of land in Green County averaged at approximately $3,000 per acre 10 years ago.
"There are have highs and lows, of course, but the value of land has gone as high as $8,000 to $10,000 recently," Marass said.
Marass added that since farmland is still seen as a good investment in Wisconsin, many buyers take advantage of Section 1031 of the Internal Revenue Code, which allows investors to defer capital gains taxes after the sale of certain properties.
"A lot of crop farmers around here are just more well-heeled than others," said Scott Vosters, agricultural lender at the Bank of New Glarus.
Dean Havens, agricultural lender at the Woodford State Bank, said the vast majority of agricultural land sold in Green County remains as farmland.
"There was a spell before the housing crisis when people were buying up land to be subdivided, but that doesn't happen much anymore," Havens said. Bay said the same is true of Lafayette County.
Mayer said there were approximately 379,520 acres of farmland in Green County in 2016, a number which has not fluctuated significantly for years.
Bay was unable to provide an estimate for the total acreage of farmland in Lafayette County, although data from the U.S. Department of Agriculture suggests numbers well in excess of 230,080 acres.