Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 17, 1991                   TAG: 9104170138
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FARM LAND PRICES ROSE IN 1990/ AVERAGE VALUE STILL BELOW '82 PEAK

As of Jan. 1, said the department's Economic Research Service report, the average market value of U.S. farm real estate, including land and buildings, was $682 per acre, up 2.1 percent from $668 a year earlier.

In Virginia, the report said, the average price per acre rose 17.1 percent to $1,516 as of Jan 1, 1990 from $1,295 a year earlier. While that was up 14 percent from the 1987 low, it was still 17 percent below the record $823 per acre nationally in 1982.

Moreover, the report said, after adjusting for inflation of more than 4 percent in 1990, last year's average value of farm real estate showed a drop of 2 percent.

"Because inflation rates of 3 percent to 4 percent in recent years have partially offset gains in nominal farm land values, a sustained recovery of real farm land values has not yet occurred," the report said.

Analysts said record crop and livestock sales receipts last year helped boost net farm income to an all-time high, and farmers' financial positions improved further as debt edged lower.

These and other factors helped strengthen farm land prices. And the increases varied regionally, with some of the strongest gains reported in predominantly agricultural areas.

Values averaged 8 percent higher in the Great Lakes states, up from a 3 percent gain in 1989. Values also rose in the northern Plains, up 3 percent; Corn Belt, 3 percent; and Mississippi Delta states, 2 percent.

"Higher grazing land values and record cattle prices helped support a 7 percent gain in farm land values in the Mountain states," the report said. "Values also advanced 4 percent in the Pacific region."

But the nation's general economic slowdown last year dampened investor activity, particularly near urban areas.

"This, in turn, reduced the demand for farm land for non-agricultural uses, putting downward pressure on farm land prices," the report said.

In a separate report, the agency said the amount of privately owned U.S. agricultural land held by foreigners jumped sharply last year but still represented a little more than 1 percent of the total.

John Lee, administrator of the Agriculture Department's Economic Research Service, said foreign ownership as of Dec. 31 was at a record high of nearly 14.45 million acres, a 15 percent increase of more than 1.87 million from a year earlier.

"Holdings have remained relatively steady from 1981 through 1990, fluctuating around 1 percent of the privately owned agricultural land in the United States," Lee said in the annual report.

The foreign-owned acreage and other information were derived by the agency from annual reports submitted under the Agricultural Foreign Investment Disclosure Act of 1978.

About 62 percent of the reported foreign holdings is actually land owned by U.S. firms, the report said. However, the law requires firms to register their landholdings as foreign if as little as 10 percent of their common stock is held by foreigners.

The remaining 38 percent of the foreign-held land is owned by investors not affiliated with U.S. firms.

Japanese investors owned 4 percent of the total foreign-held acreage, while those from Canada, United Kingdom, West Germany (at the time), France, the Netherlands Antilles and Switzerland owned 70 percent.