Farm values stabilized as 2014 ended

Farmland values stabilized by the close of 2014 from the double-digit increases of the past few years, according to Farmers National, a farm and ranch real estate company with an office in Iowa City.

Location and quality of land continue to drive prices for a given tract of land. A lower supply of land for sale and continued demand for agricultural land is maintaining general stability of the land market.

'While lower grade land has seen drops in value near 15 percent from recent highs, top quality crop and grazing land still bring solid prices as owner operators and investors seek to expand their operations with the most productive land,” said Randy Dickhut, vice president of real estate operations at Farmers National, in a news release.

Dickhut said the supply of land for sale is down because there is no tax policy change driving sales and landowners aren't selling what many consider their most important asset.

'Land is viewed as a long-term asset and owners consider agricultural land a stable investment in a changing world,” he said.

Demand for crop and grazing land from owner operators remains good, but Dickhut said buyers are more realistic in what they will pay given lower grain prices. Likewise, sellers are having to be realistic in evaluating the quality of their land and the expected selling price.

'Owner operators continue to be the main purchasers of agricultural land comprising nearly 90 percent of buyers in many areas,” Dickhut said.

The average sale price for high-quality farmland in Iowa slipped from $12,000 in January 2014 to $11,000 this month, according to a Farmers National agent survey.

Even with lower grain prices, record grain harvests will keep net farm income positive in 2015, according to Dickhut.