Capital Journal staff

 BROOKINGS — Showing the lowest rate of increase this decade, South Dakota agricultural land values increased 7.7 percent in the past year.

 South Dakota State University economics professor Larry Janssen, who co-authored a review of the survey with SDSU economics professor Burton Pflueger, said the low rate of increase is directly related to the recession.

Advertisement

 “The most recent annual change of land values is a little over 7 percent in South Dakota, and this is the lowest percentage increase in this decade,” said Janssen. “This change is probably directly related to impacts of the economic recession and the financial turmoil during the latter part of 2008 and certainly extending into 2009.”

 The survey is available to producers and the public online at http://agbiopubs.sdstate.edu/articles/C275.pdf. or at county Extension offices.

 Janssen said a major difference in the most recent survey, which is the 19th annual conducted in South Dakota, was the way land value rates and cash rental rates have disconnected.

 “Land values in most of the rest of the decade increased between 10 and 20 percent per year, and what’s different this time is that cash rental rates have increased at an as-fast or faster rate,” Janssen said. “Cash rental rates have been increasing in the past, but at a slower pace than land values. At this point cash rental rates have just kept going up.”

 Since between three-eights and two-fifths of all agricultural land in South Dakota is rented, Janssen said the survey’s findings in that area may have impacts.

 “Only a small fraction of land is purchased and sold each year,” said Janssen. “But the changes we see in land values and in land rental rates, what’s been happening there may have the most impact on the most people. It could lead to changes over the next few months.”