Surveys for Collecting Data on Agricultural Land Values, Rents, and Taxes

In 1994, questions on land values and cash rents were added to the June Agricultural Survey (JAS) to replace the Agricultural Land Values Survey (ALVS) which had been used since 1984. The ALVS, as well as the Farmland Market Survey, were discontinued after 1994 in order to reduce respondent burden and data collection costs. The JAS, conducted by the National Agricultural Statistics Service (NASS), is a probability-based survey that divides the area of the United States into "segments" representative of national land uses. A representative sample of all land uses in the 48 contiguous States is obtained by selecting approximately 1 percent of all land in these States for inclusion in the JAS. Twenty percent of the segments are replaced each year. Within the selected segments, enumerators identify "tracts," which represent a particular farm operator's acreage within the segment. Farm operators then provide per acre estimates of value and cash rents for the farmland in their tract. In 1995, 14,603 segments were sampled. Within these segments, enumerators identified 119,012 tracts, of which 50,294 were classified as agricultural. Cash rental acres were identified in 17,565 tracts (35 percent of total agricultural tracts).

The JAS-with its area-frame design, probability basis, and personal interview format—is expected to more accurately portray average conditions in each State's farmland market than did the ALVS. There are several advantages to using JAS. First, JAS uses a much larger sample: approximately 50,000 observations, or about three times as many as the ALVS. Second, the random selection of area-based segments, with 80 percent resurveyed each year, is expected to enhance the statistical reliability of USDA estimates of both farmland values and cash rents. Third, respondents estimate the value or report the cash rent for land they operate within a specific land segment (usually about 1 square mile in area). Respondents to the ALVS, on the other hand, reported values and cash rents for a nonspecific "locality." And finally, most responses to the ALVS were obtained through telephone contacts, while JAS respondents are visited.

The 1-year overlap of the two surveys in 1994 allows a comparison of cash rent estimates. For most States, the two estimates are similar; for a few States, noticeable differences exist. Several factors associated with the change of survey instrument may have contributed to the differences, but these can be bridged by comparing the cash rent indicators from successive years on each survey.

Data on agricultural real estate taxes are obtained from a national survey of approximately 4,200 taxing jurisdictions. Each provides tax and acreage information for a sample of 10 farm or ranch parcels in its jurisdiction for the current and preceding years. Respondents in jurisdictions with fewer than 10 parcels are requested to provide information on all parcels in the jurisdiction. Taxes per $100 of market value are derived by dividing the average per-acre tax by the average per-acre value of farm real estate. This data series, by State and Nation, dates from 1890 for taxes per acre and from 1909 for total taxes and taxes per $100 of full market value.

Recent ERS Reports on Land Values, Rents, and Taxes

Agricultural Income and Finance, Situation and Outlook (Annual Lender Issue), AIS-64, Feb. 1997 (Jerome Stam, ed.). This report discusses the financial conditions of commercial agricultural lenders during 1996. Focuses on the four major institutional farm lenders: commercial banks, the Farm Credit System, the Farm Services Agency, and life insurance companies. Financial institutions serving agriculture continued to experience improved conditions in 1996. In recent years, farm-debt-to-farm-income ratios have dropped and farm real estate value increases have led to significantly improved equity positions for many farmers.

"Farm Real Estate Values Continue To Increase," Agricultural Outlook, Dec. 1996 (David Westenbarger and Charles Barnard). Discusses changes in farmland values during 1995. U.S. farm real estate values as of January 1, 1996 averaged $890 per acre-a record high-marking the 9th consecutive annual increase since 1987. Agricultural Land Values, AREI Update, Dec. 1996, No. 15. (John Jones and David Westenbarger) This update reports ERS's annual estimates of farm real estate value for each of 48 States. U.S. farm real estate values averaged $890 per acre as of January 1, 1996-7.0 percent above a year earlier.

Agricultural Cash Rents, AREI Update, June 1997, No. 2 (David Westenbarger, John Jones, and Charles Barnard). This update reports ERS's annual estimates of cash rents for selected States, 1991-95. Cash rents as percentages of market value are also presented. For selected States, estimates are provided for cropland, irrigated cropland, nonirrigated cropland, and pasture. Cash rents for cropland were generally higher in 1995 than in 1994, while those for pasture were generally lower.

"Commodity Payments and Farmland Values," Agricultural Outlook, June 1995 (Robin Shoemaker, Janet Perry, and Doug Beach). Includes a general discussion of the influences that agricultural commodity program payments exert upon farmland market values. Describes possible effects that the 1995 Farm Program legislation might have on farmland values.

"New Method For Estimating Land Values," Agricultural Outlook, April 1995 (Dave Westenbarger, Doug Beach, and Chris Cadwallader). Discusses advantages to be gained from use of NASS's June Agricultural Survey (JAS) as the survey instrument for obtaining information on farmland values and cash rents. Also describes the statistical basis of JAS sample as it relates to collecting farmland value information.

(Contact to obtain reports: David Westenbarger, (202) 219-0434 [dwest@econ.ag.gov])

U.S. Department of Commerce, Bureau of the Census

(1989). 1987 Census of Agriculture. Vol. 1. Geographic Area Series. Part 51. United States Summary and State Data. AC87-A-51. Nov.

U.S. Department of Commerce, Bureau of the Census (1995). Statistical Abstract of the United States.

Wise, M.R. (1993). Farmland Investment Strategy: The Opportunity of the 1990's. WGI Publishing, Champaign, IL.

Wunderlich, G., and J. Blackledge (1994). Taxing Farmland in the United States, U.S. Dept. Agr., Econ. Res. Serv., AER-679.

WATER

2.1 Water Use and Pricing

Irrigated agriculture remains the dominant use of freshwater
in the United States, although irrigation's share of total
consumptive use is declining. National irrigated cropland
area has expanded by a third since 1969, while field water
application rates have declined about one fourth, leaving
total irrigation water applied about the same in 1995 as in
1969. Nationally, variable irrigation water costs for ground
water and off-farm surface water are roughly equivalent,
averaging near $35 per acre. Neither reflects the full costs of
water; onfarm well and equipment costs can be substantial
for groundwater access, while infrastructure costs are often
subsidized for publicly developed, off-farm surface water.

The

Contents

• Irrigation Withdrawals...

• Irrigation Consumptive Use..

• Irrigated Land in Farms..

• Irrigation Water Application Rates.

• Irrigation Water Prices and Costs..

The United States, as a whole, has adequate water supplies. Annual renewable supplies in surface-water bodies and groundwater aquifers total roughly 1,500 million acre-feet per year (maf/yr). (See "Glossary of Water Use Terms" for definitions.) Of total renewable supplies, only one-quarter is withdrawn for use in homes, farms, and industry, and just 7 percent is consumptively used (Moody, 1993). Renewable surface- and groundwater supplies account for roughly 90 percent of total water use nationwide. The remainder reflects depletion of stored ground water (Foxworthy and Moody, 1986).

1 Consumptive uses considered here include those uses occurring after water is withdrawn from a river or aquifer. Other consumptive uses―riparian vegetation use and reservoir evaporation—require no water withdrawals and are not considered here. Instream water use for hydroelectric production, transportation, recreation, or aquatic and riparian habitat is also not included.

An abundance of water in the aggregate belies
increasingly limited supplies in many areas, reflecting
uneven distribution of the Nation's water resources.
In the arid West, consumptive use exceeds half of the
renewable water supplies under normal precipitation
conditions. In drought years, water use often exceeds
renewable flow. While droughts exacerbate supply
scarcity, water needs continue to expand in the
aggregate and to shift among uses. Urban growth
greatly expanded municipal water demands in arid
areas of the Southwest and far West. At the same
time, demand for high-priority instream
(nonconsumptive) water flows for recreation, riparian
habitat, and other environmental purposes has
tightened competition for available water supplies in
all but the wettest years. While future water needs
for instream uses are difficult to quantify, the
potential demands on existing water supplies are large
and geographically diverse (see box, “Instream Water
Flows," pp. 80-81).