FIELDS OF GREEN Md. farmland prices rise 12% in year; development cited


Bill Knill's cows graze on some of the most expensive pastureland in the country. And according to a federal survey, it's getting more expensive all the time.

The price of an average acre of Maryland farmland, including the buildings, jumped 12 percent over the past year, to $2,521, the greatest percentage increase in the continental United States, according to a U.S. Department of Agriculture survey.

This compared with a gain of 2 percent for the 48 states as a whole, where the average acre of farmland cost $700.

Only four states posted a more expensive per-acre cost.

Mr. Knill, who farms 550 acres just outside Mount Airy, need only look across his cornfield at the apartment and townhouse development on the other side of his fence for a reason why land values are on the rise.

"It's the pressure from real estate development that pushes up land prices in this area," said Mr. Knill, who is president of the Maryland Farm Bureau. "And it's not just happening in central Maryland, but the whole northeast part of the country."

Robert Kleinpaste, president of Legg Mason Realty Group, agreed, citing the proximity of much of the farmland to major metropolitan areas for the higher prices.

"The Baltimore-Washington corridor, despite its current real estate problems, is one of the better markets for residential and eventually commercial development," he said.

The real estate analyst said land in prime areas of western Howard County was selling for more than $20,000 an acre and what he called "prime prime lots" -- those closer to Columbia -- were selling for $30,000 or more.

Mr. Kleinpaste said a couple of very large farms off U.S. 29 near the Montgomery County line could bring as much as $160,000 an acre.

M. Bruce West, head of the Maryland Department of Agriculture's Agricultural Statistics Service, said the USDA figure does not reflect the agricultural value of the land. The agricultural value, Mr. West said, ranges between $500 and $1,800 an acre.

"When you factor out the development value of the land to determine its agriculture value, the price drops considerably," Mr. West explained.

The variation depends on location, soil type and climate. Land in Garrett and Allegany counties, for example, is less expensive because the growing season is too short to grow full-season grain corn. The land also is hilly.

Mr. West said that, though a third of Maryland, or 2.2 million acres, is in farmland, that number has been shrinking at a rate of about 50,000 acres a year for the past decade.

Paul Maihan, vice president of research and planning at the Farm Credit Bank in Sparks, the state's largest agriculture lender, said the type of farming done in Maryland also added to the value of the land.

"We produce more high-value crops here than in the Corn Belt," he said, explaining that such operations as poultry production, greenhouse nursery products and dairy operations bring in more dollars per acre than corn or soybeans.

He cited another recent USDA survey that ranked Maryland ninth in the nation in 1991 in terms of net farm income per acre.

Ranked No. 1 in the USDA's survey of high-priced farmland is Rhode Island, where pressures from real estate development have pushed up the average price of a farm acre to $4,894.

Other states with farmland more expensive than Maryland's were New Jersey, $4,536; Connecticut,

$4,299; and Massachusetts, $3,662.

In neighboring Pennsylvania, the average price is $1,747; Virginia, $1,295; and Delaware, $2,362.

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