High crop prices and low interest rates helped push the average value of U.S. farm real estate to a record $2,350/acre at the start of this year – double the level at the start of the decade – USDA said on Monday.

The average real estate value as of Jan. 1 was up 8.8%, or $190/acre, from a year earlier, following a 14% increase the previous year, USDA said in its annual Land Values and Cash Rents Summary.

"While commercial and residential development has slowed in many regions, farm real estate values continue to increase," USDA said. "Strong commodity prices and farm programs, outside investments, favorable interest rates and tax incentives continue to be the factors that drive farm real estate values to record levels."

Farm real estate values are a measurement of the value of land and buildings on farms. USDA said cropland was worth a record $2,970/acre this year, up 10% from 2007. Pasture value rose by 6% to $1,230/acre.

The largest regional increase this year for farm real estate value was 15.5% in the Northern Plains, to average $1,110/acre. Kansas, Nebraska, South Dakota and North Dakota comprise the Northern Plains for the report.

In the Corn Belt states of Ohio, Indiana, Illinois, Iowa and Missouri, cropland values rose 14.8%, to $4,260/acre.

Nationally, cash rents per acre paid to landlords for cropland rose by $11/acre, or 13% on average, while pasture rents increased $1/acre, or 8.3%, for the 2008 crop and grazing year, USDA said.

Cropland cash rents paid in 2008 averaged $96/acre, compared with $85/acre for 2007.

The Delta region had the highest percentage increase for cropland rents: 21% above 2007. Average cropland cash rents increased $14/acre to $140 in the Corn Belt region and $6/acre to $64 in the Northern Plains region.

Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.