Over the past few months, I’ve been analyzing what the 2022 Census of Agriculture reveals about Oregon’s agricultural sector. Two data points that have garnered attention concern the loss of 667,000 acres of Oregon’s farmland and the substantial 29% gain in the per-acre value of Oregon’s farm real estate. Both findings were discussed in a recent episode of OPB’s Think Out Loud (I’m better in print). Now that I’ve gotten a better grip on the full picture painted by the Census, I want to put these results, and how they should be interpreted, into context.
Decline in farmland: The 667,000-acre (or 4%) decline in Oregon’s farmland area over 2017-2022 is strikingly large. Although Oregon still has over 15 million acres of land in farms, this decrease represents an area more than seven times the size of Portland or 72 times the area of Corvallis. In addition to the reported loss of Oregon’s farmland, the Census also shows a significant decline in the number of farms, which dropped by 2,069 to 35,547, a 5.5% decrease from 2017. It’s worth noting that the previous Census in 2017 showed a farm gain (compared to 2012) of 2,177, which offsets the decrease shown in the latest year. At the same time, the 2012-2017 Census change pointed to a 339,000-acre decrease in Oregon’s farm acreage, which seems odd but not totally implausible.
What explains the fluctuations in the number of farms? The USDA defines a farm as “any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during the census year.” This administrative definition probably doesn’t match what most people think of as a bona fide farm or ranch operation. It’s important to note that the $1,000 sales threshold doesn’t actually need to be met, only that it would have been met in a typical year. This relatively loose definition is important when considering the scope of Oregon’s farm population. Specifically, 9,465 (about 27%) of Oregon’s farms had less than $1,000 in sales in 2022. And note that the number of farms in this group, those with less than $1,000 in sales, actually decreased by 2,197 in 2022, suggesting it accounts for at least some of the decline in the overall farm count.
Regarding the 667,000-acre decrease, where did all the farmland go? We certainly did not develop 667,000 acres worth of housing, a conclusion I worry people are tempted to jump to when seeing this figure. The Census data indicate that about half of the decrease was from the loss of cropland and half from pasture. Other land-use data sources, however, paint a different picture. If we compare the National Land Cover Dataset, a satellite-based data product from the US Geological Survey, for 2016 and 2021 for Oregon, we find that only about 80,000 acres of cropland moved to a different land cover, typically pasture, grassland, or shrubland. About 2,300 acres went from cropland to development. Similar results are obtained for the pasture/hay category.
Another commonly used land use data source is the USDA’s National Resources Inventory (NRI), which is based on a combination of aerial imagery and ground-truthing. Unfortunately, we don’t yet have the most recent NRI data for 2022, but the changes from 2012 to 2017 provide insight. Over this period, the Census reports that Oregon lost 339,000 acres of farmland. The NRI, in contrast, puts that at more like 10,000-20,000 acres, depending on which categories are counted as being agricultural uses (e.g., rangeland is sometimes, but not always, used for livestock grazing).
In addition, the NRI, which is designed to track land-use change, shows that the rate of land development in Oregon and elsewhere has declined substantially over the past couple decades. Farmland does get developed, but we aren’t actually losing farmland, in a land-use sense, at anything near the rate suggested by the most recent Census. Given all of this, it seems more likely that a good chunk of the 667,000 acres was misplaced, rather than lost.
Increase in land values: The 29% increase in Oregon’s per-acre farm real estate value, adjusted for inflation, is also substantial. This compares to gain of about 9.5% in the US as a whole, and puts Oregon fourth in the US in terms of its rate of farmland value appreciation, behind Utah, Wyoming, and New Mexico, and slightly ahead of Colorado and Idaho. The value of Oregon’s farmland has been rising over the past several decades, but did it really go up by 29% in such a short period?
It’s worth noting how the Census tracks the value of farmland. Respondents are asked to estimate the current market value of all land and buildings that are part of their farm. These values are not based on actual market transactions but rather on people’s perceptions of their land’s value, including land they rent and never purchased.
Other sources confirm an increase in Oregon’s farmland value but not by as much. The annual USDA land value report, which provides state-level information, indicates a 9% gain in per-acre farm real estate value over the same period covered by the Census, largely driven by increases in the value of irrigated cropland. This report, like the Census, is based on self-reported producer estimates of land value. Observed farmland transaction prices show similar gains to the annual USDA data, though sales prices can fluctuate due to the amount of land bought and sold in a given year. The most recent farmland value report from AgWest Farm Credit, which is based on observed transactions, provides another data point showing more modest gains in the value of Oregon’s land.
Putting all of this together: An advantage of the Census is that it provides a rich data set covering all sorts of things down to the county level, which is useful for understanding what’s driving the state-level numbers. For example, the top three counties in terms of farmland value gains—Jefferson (80% increase), Benton (70%), and Wasco (68%)—also saw significant decreases in farm acreage. Jefferson County, for instance, lost 250,000 acres (32%) between 2017 and 2022, mostly due to a decrease in grazing land and woodlands. Benton County lost 24% of its land (about 30,000 acres), mostly woodlands. Wasco County lost 30% of its land (about 410,000 acres), with over 90% classified as grazing land. Similar patterns are seen in Sherman, Union, and Curry counties. In general, the recent Census appears to have accounted for disproportionately less of the lower-valued land in these counties, which sort of mechanically drives up the county-wide value of what’s remains.
In general, counties that lost a lot of farmland tended to see large gains in farmland value, but the converse doesn’t always hold. Crook and Lake county, for example, saw increases in farmland acreage and increases in farmland values of more than 60%. The point is that we need to think carefully about all of the different factors that are changing when drawing conclusions based on the Census data.
Another factor to keep in mind is that the Census is really more of a comprehensive survey. The response rate in 2022 was 61% nationwide, down from the 70-75% response rates obtained for the last two Census years. Lower response rates inherently introduce more noise and less certainty in the estimates. Many of the counties with large farmland acreage declines experienced severe droughts in the years leading up the Census which could have conceivably affected whether they responded at all and how they responded in terms of the land they considered to be part of their farm.
Wrapping up: With all of this said, what can we conclude about the trend of Oregon’s farmland acreage and land values? On one hand, the direction of the changes reported in the Census is, by all accounts, accurate. We are, and have been, losing farmland and simultaneously seeing its value rise. On the other hand, the substantial changes reported in the most recent Census seem to be driven at least partly by survey design and response rates, rather than actual changes in these two high-level summary statistics. When studying something like farmland over a broad geographic area, it’s impossible to track every change that occurs with 100% accuracy. Instead, analysts rely on different data sources, some of which are based on surveys. There’s always going to be some error in what’s being measured, so it’s important to pay attention to how data are collected and what effect that might have on your findings. Given all this, it’s probably best to consider the massive changes for Oregon revealed in the latest Census to be upper bounds on what actually happened and, in all likelihood, a bit of an exaggeration.