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How is price per acre determined?

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Quick Answer

The average acre price per acre stands at approximately $3,000, since 2013, as determined by the United States Department of Agriculture. However, this depends on whether one refers to acres in terms of real estate, cropland or pastures. Since 2013, no serious price alterations have been made.

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How is price per acre determined?
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Full Answer

In terms of United States real estate specifically, the $3,000 estimate works the best. This is roughly a 9.4 percent price increase since 2012. When referring to cropland, the average expected price is around $4,000 per acre, with the higher price reflecting the greater use of the land. Cropland is almost always intended for productivity and, therefore, profit.

Since 2004, cropland prices have more than doubled from around $1,500 per acre to approximately $4,000, according to the USDA National Agriculture Statistics Services. However, that this is only the average total U.S. estimation. The price per acre in individual states varies, with a 8.6 percent reduction in acreage prices in New Mexico to a 41.5 percent increase in North Dakota over the same time period.

The price of pasture land is calculated differently, which currently averages $1,200 per acre, as of 2013. Since pastures are generally smaller than other sections of land, as they are typically meant for use by domestic animals, these are usually cheaper than real estate or cropland.

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