Proven Appreciation

According to a 2007 report published by Auburn University extension service economists, the average price of farmland in 1970 was $200 per acre. By 2007 the average price of farmland jumped to $3100 per acre. This calculates to a 1450% increase over the 37 yr. period of 40.3% per year. Yearly cash flow values that affect the rate of return over time i.e.; crops, crop leases, hunting leases and government subsidy programs have also increased greatly over the same period.

The figures of timberland are similar to farmland in their rate of return, the main difference being that over the same 37 year period much of the appreciation in timberland is not only in the land but also in the commodity (timber) which would have yielded somewhere between $2000 and $4000 per acre over the same period depending on the type of timber and the quality of the soil.

The figures above are generalized to the whole state and of course over time some farm and timber tracts appreciate faster than others. Some farm and timber tracts provide yearly income and others provide very little. Appreciation rates for farmland and timberland can be greatly increased if land is purchased that transitions over time, either through regional population growth patterns and/or subdivision into a higher value rural residential or development classification.