CHICAGO, Aug 1 (Reuters) - The value of U.S. farmland rose about 8 percent in the past year, with the biggest increase in the northern Plains while Corn Belt prices remain the highest, the U.S. Department of Agriculture said on Friday.
Farm real estate values, which includes land and buildings, averaged $2,950 per acre in 2014, up 8.1 percent from 2013, the USDA said in its annual report based on surveys of 11,000 land parcels and taken during the first two weeks of June.
The northern Plains, an area where farmers have expanded corn plantings at the expense of wheat, saw the biggest jump in overall real estate values at 16.3 percent, USDA said.
Farmland, which has soared in recent years as grain prices hit record highs, is closely watched by Fed policy makers, farm lenders and farm suppliers from equipment makers to seed dealers since farmland is the basic collateral for most farm loans and an indicator of the health of the U.S. farm economy.
Since grain prices have fallen some 40 percent in the past year, bankers and economists will be tracking farmland sales this fall.
USDA also said cropland values increased by $290 per acre, or 7.6 percent to $4,100 from the previous year. Cropland in the northern Plains increased 13.6 percent from the previous year while the region stretching from Montana to New Mexico fell 5.1 percent.
Corn Belt farmland averaged $7,000 an acre, up 8.2 percent from a year ago. Iowa, the top corn and soybean producer, led the Midwest with the average farmland price at $8,750 an acre, up 9.4 percent since 2013.
U.S. pasture land rose to $1,300 per acre, up 11.1 percent from last year.
(Reporting by Christine Stebbins; Editing by Ken Wills)