Iowa farmland values still falling
Survey shows 3.7 percent decline since March 1
George C. Ford
The average value of a good acre of Iowa farmland continues to decline in the face of continuing low corn and soybean prices and the prospect of higher interest rates.
A survey released Wednesday by the Iowa Chapter of Realtors Land Institute shows the value of an average acre of tillable land declined 3.7 percent from March 1 to Sept. 1. Over the last 12 months, the value of an average acre of tillable farmland fell 8.7 percent, according to the survey.
Higher quality land showed a decline from an average $9,158 an acre on March 1 to $8,811 on Sept. 1.
“Since our highs in 2013, we have seen a decrease in land values of roughly 25 percent to 30 percent,” said Troy Louwagie of Hertz Real Estate Services in Mount Vernon.
The average value of an acre of medium-quality Iowa farmland declined from $6,693 at the beginning of March to $6,443 six months later, and lower-quality farmland slipped from an average $4,362 to $4,214.
All nine Iowa crop reporting districts showed a decrease in the average farmland value. In east central Iowa, the value of an average acre of good farmland fell 4.3 percent to $9,524 on Sept. 1 from $10,009 on March 1. The largest six-month decline in farmland values was reported in southwest Iowa where the value of an average acre of good farmland fell 5.8 percent to $7,618 on Sept. 1 from $8,167 on March 1.
With the lower land values, Louwagie said some investor money is coming into farmland.
“There have been very few farms for sale in the last six months,” he said. “We’ve had some auctions within the last week that have had extremely good attendance, good bidding and good sales.
“I think we could continue to trend softer — 3 percent or 4 percent. We can survive with that.”
David Oppedahl, Federal Reserve Bank of Chicago senior business economist, said in a news release that agricultural credit conditions in the second quarter of 2016 were weaker than a year ago. Repayment rates for farm loans softened relative to a year ago, but not by as much as during each of the prior two quarters.