Benchmark Value Update
Cary C. Matthews
Chief Appraisal Officer
Farm Credit Midsouth
Land values appear to be increasing again in Eastern Arkansas. Increases in value began to slow after 2017 and into 2018. Land values are slowing increase after being flat to decreasing. Based on the period from 7/1/2020 to 6/30/2021, benchmark values ranged from no increase in Craighead County to a 6.98% increase in Cross County. Clay County experienced a slight decrease of 2.78% after a 10.77% increase in 2020, Lee County increased 4.26%, and St. Francis County increased 4.17%. Farm Credit Midsouth uses five benchmarks to estimate changes in land values from year to year. Land values were steadily increasing for several years in Eastern Arkansas. In 2015 land values began stabilizing and slightly declining in 2018.
The chart below shows the benchmark land value change since 2017.
The Cross County benchmark is a near level, irrigated rice and soybean farm. Several sales were analyzed, and a value was estimated in the mid-range at $4,600 per acre. The value has been increasing since 2018 after experiencing a drop. The value rebounded slightly in 2019. Note: The price per acre in years prior to 2018 included structural improvements. The structural improvements were not valued in 2018. The percent change, in 2018 (6.19%) is based on the value of the land ($4,424) in 2017.
The Craighead County benchmark is a precision leveled, irrigated cotton, soybean, and corn farm, with the irrigation well located off-site. After adjustments, the comparable sales presented no change in value, with the best sales indicating around $6,900 per acre. Comparable sales were very limited in the past year.
The Clay County benchmark is a precision leveled and irrigated cotton, soybean, and corn farm. Sales have been very limited to non-existent in past years. Several sales that occurred in the past year were analyzed, and a value was estimated in the mid-range at $7,000 per acre. This indicates a decrease in value of 2.78% in the past year. The trend of no change for three years and then a 10.77% increase in 2020 is attributed to the lack of sales in the past years.
The Lee County benchmark is a precision leveled and irrigated rice, soybean, cotton, and corn farm. After adjustments, the comparable sales presented a reasonable range, with the best comparable sales indicating around $4,900 per acre. The 2020 value was estimated at $4,700 per acre. This indicates an increase of 4.26% compared to a 4.44% increase last year.
The St. Francis County benchmark is a precision leveled and irrigated rice and soybean farm. Several sales were analyzed, and a value was estimated in the mid-range at $5,000 per acre. The value was stable 2020. Note: The price per acre in years prior to 2018 included structural improvements. The structural improvements were not valued for 2018.
In conclusion, this year’s update appears to be, when compared to recent years, a return to more healthy increases with certain areas experiencing slightly more increase in value. It is my opinion that stagnant to slight increases are indicative of a land market that, while not significantly increasing or decreasing, is healthy and is a market that does not point to a precipitous drop in value in the near future. 2021 benchmarks show an overall increase of 2.52% for the period from July 1, 2020 through June 30, 2021.
Benchmark Land Value Change Since 2017
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|County||Cross||Craighead||Clay||Lee||St. Francis||Total||Average Increase|
|Appraised Value 2017||$3,760,000||$768,000||$520,000||$352,000||$1,267,000||$6,667,000|
|Percent Change in Value||0.00%||1.59%||0.00%||0.00%||0.00%||0.32%|
|Appraised Value 2018||$3,320,000||$768,000||$520,000||$352,000||$1,099,000||$6,059,000|
|Percent Change in Value||-6.19%||0.00%||0.00%||0.00%||-3.43%||-1.92%|
|Appraised Value 2019||$3,360,000||$804,000||$520,000||$360,000||$1,147,200||$6,191,200|
|Percent Change in Value||1.20%||4.69%||0.00%||2.27%||4.39%||2.51%|
|Appraised Value 2020||$3,440,000||$828,000||$576,000||$376,000||$1,147,200||$6,367,200|
|Percent Change in Value||2.38%||2.99%||10.77%||4.44%||0.00%||4.12%|
|Appraised Value 2021||$3,680,000||$828,000||$560,000||$392,000||$1,195,000||$6,655,000|
|Percent Change in Value||6.98%||0.00%||-2.78%||4.26%||4.17%||2.52%|