Trends in Major Land Uses
The U.S. land area covers nearly 2.3 billion acres. Since
ERS' Major Land Uses (MLU) series began in 1945,
forest uses of land have accounted for the largest share of the
Nation's land base, due to extensive forests in Alaska. In the
conterminous 48 States, grassland pasture and range represents the
largest share of the land base. About 51 percent of the U.S. land
base (including Alaska) is used for agricultural purposes,
including cropping, grazing (on pasture, range, and in forests),
and farmsteads/farm roads.
Land shifts into and out of uses for a variety of reasons.
Changing commodity and timber prices, agricultural and natural
resource policies, urban pressure and, more recently, bioenergy
policies prompt private landowners to shift land to uses that
maximize economic returns. While land moves into and out of certain
uses, such as between forestry, grassland and cropland, once
converted to an urban use, land rarely transitions back to
less-intensive agricultural or forestry uses. The ERS Major Land Uses
series analyzes trends in all these land uses and
examines general factors driving land-use changes, while other ERS
research takes a more in-depth look at particular issues--including
research on how farmers altered land use decisions in
response to ethanol-induced increased demands for corn (see The Ethanol Decade: An
Expansion of U.S. Corn Production, 2000-09, EIB-79, August
2011), and the role of crop insurance and other farm
programs in grassland to cropland conversions (see Grassland to Cropland
Conversion in the Northern Plains: The Role of Crop Insurance,
Commodity, and Disaster Programs, ERR-120, June
2011).
Technology has also affected land use and regional land-use
shifts, especially in cropland. The rapid adoption of new
technology, improved crop varieties, improved insect and disease
control, and other changes have boosted agricultural productivity
so that more production can be obtained from the same cropland
base. See The
Changing Organization of U.S. Farming (EIB-88, December
2011), for a broader discussion of changes that have
occurred in farming since 1982.
Although the spikes in commodity prices and farmland values that
began in 2006 might suggest that more land would be shifted into
cropland uses, our analyses reveal that in 2007, total cropland
area--which includes cropland used for crops, idled cropland and
cropland used for pasture--reached its lowest level since the MLU
series began in 1945. Trends vary by region, however.
While cropland used for crops (the dominant component of total
cropland) increased in the Corn Belt over the last five decades,
both the Northeast and Southeast have experienced a long-term
decline in cropland due to urban pressures and a comparative
disadvantage in the production of many crops. Even when
cropland acreage appears relatively constant at a national level,
the mix of crops produced changes in response to market forces and
policy changes. For example, historically high prices for
corn in recent years have contributed to significant increases in
land planted to corn, which--at 92.6 million acres in 2007--was at
its highest level in more than 44 years. At 10.4 million
acres in 2007, cotton acreage was at its lowest level since
1963. The MLU series provides trend
analyses for principal crops and other ERS research (see, for
example, The
Ethanol Decade: An Expansion of U.S. Corn Production, 2000-09,
EIB-79, August 2011) has analyzed how increases in corn plantings
have led to complex adjustments in other cropping
decisions.
Trends in Farmland Values
Worth $1.85 trillion, farm real estate (land and structures)
accounted for 85 percent of the total value of
U.S. farm assets in 2010 
. Following the 1980s farm
crisis--during which farmland prices declined in response to
rapidly rising interest rates and higher energy prices--farm real
estate values (land and buildings) have increased consistently, and
in recent years have exhibited above-average growth.
ERS research (see Trends
in U.S. Farmland Values and Ownership, EIB-92, February
2012) examines trends in farmland values, and assesses the
affect both macroeconomic (interest rates, prices of alternative
investments) and a wide variety of parcel-specific factors (e.g.,
soil quality, government payments, proximity to urban
areas) have on farmland values. Among other findings, this research
reveals that in the last few years, U.S. farmland values have been
supported by strong farm earnings: since 2009, average income from
farming has been more than sufficient to service the debt on farm
real estate purchases at current mortgage rates. However,
there have been periods of imbalance in the past, including over
the 2005-08 period and during the 1978-85 farm financial
crisis. In addition to farm earnings, historically low
interest rates are a significant contributor to the farm sector's
current ability to support higher land values. Strong farm
earnings have helped the farm sector in many regions to withstand
the downturn in the residential housing market.
Regional variation in farmland values is significant, owing to
general economic conditions, the health of the local farm economy,
public policy, and location-specific characteristics that affect
the returns to farmland. In the Northeast, farm real estate values
were over twice the national average in 2010, whereas values in the
Mountain region were less than half the national average. Farmland
values also vary by land use. Historically, U.S. cropland has
maintained a substantial premium over pastureland due to higher
per-acre returns, as evidenced by cropland's higher rental rates.
The value differential between cropland and pastureland has been
declining in recent years in most regions, with the Southeast and
Delta States recently seeing pastureland values (but not rents)
exceeding cropland values. ERS research (see
Trends
in U.S. Farmland Values and Ownership, EIB-92, February
2012) examines factors contributing to these changes
in historical relationships.
| Value and cash rent by farm production
region, 2010 |
| |
Farm Real Estate |
Cropland |
Pasture |
| |
Value |
Value |
Rent |
Value |
Rent |
| |
Dollars per acre |
| Northeast |
4,690 |
5,220 |
54 |
3,150 |
26 |
| Lake States |
3,300 |
3,090 |
107 |
1,760 |
27 |
| Corn Belt |
3,680 |
4,000 |
152 |
1,940 |
30 |
| Northern Plains |
1,070 |
1,390 |
71 |
515 |
16 |
| Appalachia |
3,520 |
3,590 |
71 |
3,300 |
20 |
| Southeast |
3,570 |
3,750 |
62 |
4,030 |
18 |
| Delta |
2,230 |
1,920 |
84 |
2,140 |
16 |
| Southern Plains |
1,530 |
1,430 |
34 |
1,340 |
7 |
| Mountain |
911 |
1,530 |
75 |
518 |
4 |
| Pacific |
4,050 |
5,070 |
219 |
1,700 |
15 |
| 48 States |
2,140 |
2,700 |
102 |
1,070 |
11 |
Source: Land Values and Cash Rents, 2010 Summary
(USDA-NASS)  . |
Trends in Farmland Ownership
Ownership status affects whether the benefits and risks of
owning farmland accrue to active farmers or non-operating
landowners. ERS research (see Trends
in U.S. Farmland Values and Ownership, EIB-92, February
2012) finds that about 40 percent of U.S. farmland
has been rented over the last 25 years, but some of this land is
rented from other farmers. Non-operators owned 29 percent of
land in farms in 2007 (the most recent statistic available), though
that proportion has declined since 1992. In 2007,
non-operating owners owned more than 30 percent of the land in
three of the top four agricultural production regions (Northern and
Southern Plains and the Corn Belt). Despite recent increases
in foreign ownership of forest land, as of February 2009, only 1.7
percent of privately owned land in farms or forest, or 22.8 million
acres, was owned by foreigners.