Farmland prices stabilize in Iowa

Prices and demand for farmland in Iowa, Nebraska, South Dakota and Wyoming remained strong in the first six months of this year, according to Farm Credit Services of America.

Farmland values appear to have stabilized in Iowa, where the market showed signs of softening in the last six months of 2013. The number of farmland auctions remained at 2013 levels in Iowa, Nebraska and South Dakota after dropping 25 percent from a historic high in 2012.

Cropland in the three states showed the greatest gains through June 2014. The findings are based on FCSAmerica's semiannual appraisal of 64 farms identified as benchmarks for land value and real estate trends.

Twenty-one of the FCS America benchmark farms are in Iowa.

Troy Louwagie of Hertz Real Estate Services in Mount Vernon said farmland owners and operators are adjusting to lower prices for corn and soybeans, creating a farmland market in transition. Corn prices are nearly $3 per bushel lower and soybean prices are close to $4 per bushel below the record highs of the past two years.

'We have definitely seen a leveling in the farmland market,” Louwagie said. 'The higher-quality land is holding its value while the medium- and low-quality land has started to soften.”

Kirk Weih of Hertz Farm Management in Mount Vernon said the nation appears headed for bumper corn and soybean crops, which will depress commodity prices.

'Farmers planted 91.6 million acres of corn, which is the fifth-largest corn crop in the United States since 1944,” Weih said. 'Corn stocks totaled 3.85 billion bushels, which is up 39 percent from a year ago.

'Soybean plantings totaled a record 84.1 million acres. That is 7.4 million acres more than last year.”

Weih said it appears corn will remain in the $3.50 to $4 per bushel range through harvest with soybeans in the $10 to $11 per bushel range by the end of the year.

'The 2014 outlook for farms remains positive,” said Randy Dickhut, vice president of real estate operations of Farmers National Co. of Omaha. 'Farm owners continue to search for high-quality land to expand their operations.

'I think economic forecasts overrated the demise of the U.S. land market. Things didn't fall apart, but instead held steady and strong.”

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