Profits Lure Investors To Farmland In Arkansas

by George Waldon  on Monday, Nov. 19, 2012 12:00 am  

The biggest portfolio up for sale in the state includes five east Arkansas farms totaling more than 27,000 acres.

The properties were assembled during the past 30 years by the Church of Jesus Christ of Latter-day Saints. (For more on those developments, click here.)

Agri veternan Ted Glaub won’t be surprised if demand for premium cropland continues to push values toward $10,000 per acre during the next five to 10 years.

“We’re seeing sales I can’t believe,” said Glaub, owner of Glaub Farm Management in Jonesboro. “A 320-acre precision-leveled farm in the Missouri Bootheel sold for $7,100 per acre. Another area farm sold in the $7,000-per-acre range.”

Arkansas Cropland Value*

20082009201020112012Avg. AnnualChange
Irrigated $1,920 $2,100 $2,250 $2,450 $2,750 10.8%
Non-Irrigated $1,650 $1,600 $1,700 $1,750 $1,950 4.5%

*Average value per acre
Source: U.S. Department of Agriculture

Reliable Income

Cropland holds the allure of a reliable annual income stream from rent and a share of the harvest plus the additional luster of appreciation.

Investor landlords rejoice with their tenant farmers bringing in sheaves of cash.

“It is capital-intensive, but there are good returns,” said Jerry Meyer, real estate manager for the Arkansas Teacher Retirement System.

“Farmland produces relatively good cash returns from rents and historically good appreciation. A major component of our investing is appreciation.”

The state’s largest pension fund made its first foray into Arkansas cropland last year. ATRS bought a 2,866-acre Cross County farm about three miles south of Parkin from a German investor.

 

 

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