A recent discussion of appreciating U.S. farmland values in a national weekly agricultural-based newspaper included the

following quote by a rural appraiser: “Recreational aspects of land like wild game hunting, fishing, water activities, and

wildlife and bird watching is now dominating southern and western states,” and “Recreation is definitely driving today’s

market” (AGWEEK Wire Report, May 2, 2005 page 23). Such commentary has been frequent in the local press editorials

and online hunting Web page forums in North Dakota in the last few years, particularly after a South Dakota newspaper

reported that out-of-state hunters in South Dakota have been paying excessively high amounts for agricultural land resulting

in increasing land values (Shouse and Hascall, 2004).

The South Dakota newspaper report findings were based on the comparisons of agricultural land prices paid by both locals

and non-residents in eight counties from 2001 to 2004 (230 sales). Approximately 35 percent of those sales were to

nonresidents, and 93 percent of these buyers purchased land specifically for hunting purposes. In two counties dominated

by pheasant hunting the non-residents paid a 40 percent price premium versus a 15 percent premium in four counties with a

mix of pheasant and waterfowl hunting, and no observed price premiums in two other counties dominated by waterfowl

hunting. No efforts were made to quantify (and control for) differences in the bio-physical characteristics of the sold hunting

and agricultural parcels.

Agricultural land purchases by non-local buyers for hunting purposes (106 sales) were compared to nearby (comparable)

land purchases of local agricultural producers (318 sales) in the Southwest and Prairie Pothole Regions (PPR) of North

Dakota from 2000 to 2004. In the PPR (dominated by waterfowl hunting), it was demonstrated that non-locals do not pay a

premium for agricultural land that they purchase for hunting purposes. In the Southwest Region (dominated by pheasant

hunting), it was found that nonlocals pay between 23 and 24 percent more for agricultural land based on mean differences,

but that if median differences are evaluated, these premiums range from 19 (nearby sale comparisons) to -4 percent (county-

wide comparisons). These discrepancies in mean and median price premiums are shown to result from the existence of

several statistical outlier sales. These results imply that recent surges in agricultural land prices across the entire state of

North Dakota cannot be attributed solely to non-local hunting purchases. It was also noted that most non-local purchasers of

hunting land do restrict public hunting access and that they also usually lease their land to local producers.

Dr. Steven Shultz is the Director of the Real Estate Research Center and the Baright Professor of Real Estate and Land Use

Economics at the University of Nebraska-Omaha. He was previously an Associate Professor of Natural Resource

Economics at North Dakota State University. He received his Ph.D. from the University of Arizona in 1993 and is an

academic member of the ASFMRA. In North Dakota it is widely assumed that non-resident or nonlocal

purchases of agricultural land for hunting purposes are substantially greater than prices paid by local agricultural

producers, and that these price premiums, have led to recent surges in agricultural land prices across the state. There are

two other commonly raised concerns with non-local hunting purchases. First, that they reduce the supply of land available to

young, early career farmers, and, second, that hunters will restrict public hunting access by “posting” their land. However,

such claims, particularly the contention that non-local hunters are paying price premiums are considered suspect since they

have been based on relatively small and non- random sample sizes, and because they have not always accounted for

differences in the bio-physical characteristics of hunting versus nearby agricultural sales.

There exists an extensive body of literature focusing on agricultural land being purchased for residential developments

near urban areas (Chicoine, 1981; Irwin, 2002; and Huang, et. al., 2006). Additional research has demonstrated the

importance of recreation-based amenities such as scenic views and access to wildlife habitat in influencing both migration to

rural areas (Clendenning, Field, and Kapp 2005) and rural property values (Spahr and Sunderman, 1995; Bastian, et al.,

2002; Paterson and Boyle 2002). However, no studies have yet quantified the impact of non-resident hunting-based

purchases of agricultural land, and in particular, whether such purchases exceed prices paid by local agricultural producers

which could subsequently lead to inflated agricultural land prices. This deficiency in the literature is likely due to the complex

task of identifying the residency status and purchase intentions of agricultural land buyers, as well as difficulties in

comparing the bio-physical characteristics of non-resident hunting versus agricultural parcels.

This present research involves comparing 106 agricultural land purchases by non-local persons for hunting purposes to

nearby (comparable) land purchases by local agricultural producers (n=318) in the Southwest and PPR of North Dakota from

2000 to 2004. Both subject and comparable properties were mapped with geographic information system (GIS) technologies

in order to quantify bio-physical differences between sold parcels. Comparable sale analyses (while accounting for the

proximity of hunting sales to agricultural sales and various bio-physical characteristics of parcels) were used to quantify

price differences between non-local hunting and local agricultural sales in each region. Local agricultural sales are defined as

purchases of land for the purposes of agriculture production. Comparisons were made separately for two eco-regions: the

Southwest and the PPR. Both regions have relatively low population densities. The Southwest region is characterized by

un-glaciated, residual shale soils and dry conditions (rainfall in most areas is less than 10 inches per year). The production

agriculture in this region is dominated by pastureland with some dry land wheat. Mild winters with low precipitation,

particularly during spring breeding seasons, has resulted in high numbers of pheasants and a burgeoning hunting industry

catering to residents from the central and eastern parts of the state (Bismarck, Grand Forks, and Fargo) as well as non-

residents. In contrast, the PPR is subject to higher levels of precipitation (12-16 inches per year), colder winters, and has

landscape dominated by extensive quantities of depressional (glaciated) wetlands. The region encompasses a mix of

agricultural production systems ranging from high value row crops in the east to lower valued small grains in the west. The

wetlands of the region place limitations on production agriculture but create critical waterfowl habitat (springtime breeding

and nesting) and waterfowl hunting opportunities. While waterfowl hunting pressure is relatively light in this part of North

Dakota compared to other states, recent disputes between resident and non-resident hunters concerning hunting access

and the timing and duration of non-resident hunting days have become commonplace in recent years.

Methods and Procedures

Statewide agricultural land sales from 2000 to 2004 were compiled by obtaining all arms-length, unimproved agricultural

sale records from both the Office of the State Tax Commissioner and individual county tax assessors. An “armslength

sale” is defined as an open-market sale between two unrelated parties, both seeking to maximize their positions from

the sale transaction, while an “unimproved sale” includes only land and not any buildings and/or equipment of substantial

value. This database of 4,280 sales represents approximately 65 percent of all sales in the state since non-disclosed

(confidential) sales are not available to the public and some of the collected sales data had missing and/or erroneous data.

Informal discussions with county tax directors across the study area (who work with both disclosed and non-disclosed sales

data) confirmed that there are not substantial differences in either land sale values or residency status among disclosed and

non-disclosed sales. Agricultural sale transaction records were searched in counties in the Southwest region and PPR

where hunting sale purchases were known to occur. As well, rural appraisers and real estate

agents across the state were asked to provide information on known hunting sales. A possible non-local hunting sale in the

state was defined as the buyer having a non-local address (i.e., either residing out of state or in one of the three main cities

of the state: Bismarck, Grand Forks, or Fargo). These sales do not represent every possible non-local sale as the study only

focused on counties where hunting activity was prevalent and/or where county tax directors and recorders offered assistance

in searching deed records. Information obtained from the sale transaction data included legal descriptions, acreage,

consideration, and buyer and seller names and addresses. All sales were cross-referenced with county tax assessor sale

files to confirm that they were arms-length sales and did not include any non-land assets.

Non-local buyers were surveyed by both mail and telephone in order to identify whether their purchase was motivated by

hunting, investment, or production agriculture. Investors who

also hunted on their land were classified as hunting purchases.

The surveys were also used to: 1) quantify purchaser motivations and preferences for hunting land; 2) assess whether

they lease their land back to local producers; and 3) determine whether non-local buyers restrict public hunting access.

Local buyers of agricultural land were not surveyed as it was assumed that those local residents do not generally purchase

land for hunting purposes. An exception to this would be the purchase of land by local hunting outfitters who run private

hunting lodges, but the location of these operations are known and these did not appear to be in close proximity to any of

our identified sample of 106 hunting sales over the 2000 to 2005 time-period.

Sale parcel boundaries were digitized into a GIS based on the reported legal description of the sale in conjunction with the

following background reference material: satellite imagery; the National Agricultural Statistics Service (NASS) cropland data

layer (CDL); and common land unit (CLU) boundaries produced by the Farm Service Agency (FSA). This enabled the

bio-physical characteristics of sold parcels to be quantified through the use of spatial “overlay” functions. Sale

characteristics that were compared among hunting and agricultural sales included sale price and acreage, and a variety

of bio-physical characteristics such as crop and wetland acreage, spring wheat yield, and miles of both perennial and

intermittent streams within sold parcels. Cropland acreage was determined from the NASS-CDL. Soil productivity was

extracted from the SSURGO digital soils database produced by the Natural Resource Conservation Service (NRCS) which

used spring wheat yield measured in bushels as a proxy for soil productivity in the state. Wetland acreage was estimated