Farmland values are highly dependent on land and soil type, productive capacity and access to markets and hence vary significantly between states (see Map 3) and locations within states. Average farmland values are strongly correlated with commodity price movements (Graph 5), although there is often a time lag and land values are minimally affected by short term fluctuations and shocks to commodity prices.

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^{Source: USDA, Savills Research}

In the US, values, in contrast to the UK, are generally not influenced by demand from non-farmer or ‘lifestyle’ buyers except in areas close to population centres.

The effect of the diverse demand profile for UK farmland compared with other countries where values are much more closely correlated to farm output and commodity prices is significant. The graph shows farmland values in domestic currency to eliminate any exchange rate effect.

Since 1950, average values across the US have recorded an annualised increase of 6.6% with an increased rate of growth during the past 10 years, despite a correction in 2009, of 8.1%. The corresponding figures for UK farmland are 7.5% and 13.7%.

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^{Source: USDA, Savills Research}

These figures reflect the increased presence of non-farming/ investor buyers competing with the farmer buyers, which has ensured steady growth over the past decade without any pause. In the US, farmers represent three quarters of buyers with investors making up the final quarter.

Average farmland values across the US are now almost $3,000 per acre with average cropland at just over $4,000 per acre and pastureland at $1,300 per acre. Values are closely correlated with the productive output, with the highest average cropland values in the Corn Belt at $7,000 per acre with Iowa recording $8,750 per acre. The wide variation in average values between states is illustrated on Map 2. The average hides a wide range of values and driving crop yield productivity gives long term gains in asset performance.

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^{Source: Savills Research}

There is little data available on the amount of farmland sold every year in the US. However, anecdotal evidence suggests that market activity has historically been very thin, with some estimates indicating that only around half of one percent of US farmland is sold each year.

As in the UK, studies suggest that farmland sales generally only occur due to death or retirement rather than a result of affordability levels. In 2012 USDA reported that many farming families rely on holding land for a retirement fund. In addition, the report noted that relatively little privately owned farmland (1.7%) in the US is under overseas ownership – see A Question of Ownership for more detail.

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^{Source: Savills Research}