Skyrocketing Land Prices Squeeze Out Next Generation Of Oregon Farmers

The value of farmland in Oregon has surpassed national averages, sparking concerns about the affordability for the next generation of farmers to continue working the land.

According to an analysis of data from the latest U.S. Census of Agriculture, the estimated value of Oregon farmland increased by 23% to $10.7 billion between 2017 and 2022 — more than three times the 7% rise in the estimated value of farmland nationwide.

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"This prolonged period of increase is pretty unique, at least in modern history," remarked Oregon State University economics professor Dan Bigelow, who conducted the analysis, in an interview with the Oregon Capital Chronicle.

Rising values resulted from several factors, including historically low interest rates over the past 10 years, a decrease in available farmland, and industry consolidation.

"Throughout the last several decades, its (farmland) value has kind of outpaced inflation," Bigelow said. "It tends to hold its value during economic downturns, and it's not the type of investment that you're going to get rich quick off, but it's a durable asset. It's not depreciating in value."

According to Bigelow’s analysis, farm values in Oregon increased 29% per acre between 2017 and 2022. On average, Oregon farms are worth an estimated $3,700 per acre, but there are big differences between counties. Land values in Willamette Valley, the most valuable farmland in the state, are more than $20,000 per acre because of the value of the crops such as wine grapes and fruit orchards grown there. 

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High land values make it more difficult for new farmers to acquire land. The average Oregon farm is worth $1.5 million — 30% more than it was in 2017 and double the average increase nationwide. However, the average farm income was a bit over $26,000 in 2022.

"Farms have to be bigger and bigger to succeed, and then you get the regulations that the state imposes on farmers big and small, and it makes it really hard for beginning farmers to start out and really hard to be positive financially," Oregon Farm Bureau spokesperson Austin McClister told the Oregon Capital Chronicle.

As a result, many farmers sell to big corporations or investment trusts, a trend that doesn't sit well with Alice Morrison, co-director of the nonprofit Friends of Family Farmers. Friends of Family Farmers works with older farms to transition their land to new farm families.

Morrison believes regulation is the key to giving new farmers the ability to compete in the market and provide older farms alternatives to selling to investors and corporations.

"It's unreasonable to tell a person who's about to retire: ‘Hey, you have to forgo the money you thought you would have for retirement in order to live your values,'" she said. "We should have options so you can live your values and retire with dignity."

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