After years of decline, the value of Iowa’s farmland has shown some strength during the past year and a half.
Statewide, the average value of Iowa cropland rose by 2.9 percent between September 2017 and March, according to a survey done by the Iowa chapter of the Realtors Land Institute. Extended back to March 2017, land values in Iowa have increased 4.9 percent in the past year.
The most recent increase continues an 18-month streak in the Land Institute surveys where values have been on the rise after consistent decreases since 2013.
“We go back to 2009, ’10, ’11, that is when the land market exploded. That was due to $7, $8 corn. Commodity prices have softened a fair amount since that time,” said Troy Louwagie, an accredited land consultant with Hertz Real Estate Services.
“Land prices generally follow farm income. The interesting thing though, if you look back over the last 18 months, two years, as commodity prices soften, land prices have actually remained fairly strong.”
The average price for cropland in Iowa was $6,951 per acre, according to the March survey.
Louwagie said the increase in land values is due to a combination of factors. Primarily, he said, Iowa has seen a low supply of available land.
“Right now, if you’re looking to buy a high quality farm, they’re hard to come by,” Louwagie said.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Increases in land values come as farmers in Iowa and the country face lower commodity prices. And, just because values here are up, that doesn’t mean farmers will see relief from those pressures.
For example, the U.S. Department of Agriculture expects nationwide farm income to come in around $59.5 billion in 2018. That would be down more than 7 percent from 2017 and down more than half what it was five years ago.
“We are heading into softer times. The next year is going to tell a lot out there about what’s going on in the farm economy,” Louwagie said.
Plus, Iowa land values are still down about 20 percent from where they were in March 2013, Land Institute surveys show.
l Comments: (319) 398-8366; email@example.com