Iowa farmland values jump nearly 20 percent

The average value of an acre of good Iowa farmland jumped 19.7 percent since September, according to a new survey of Realtors who specialize in farm and land sales, management and appraisal.

The Iowa Farm and Land Chapter No. 2 of the Realtors Land Institute on Tuesday said the average value of an acre of good Iowa farmland was $7,389 on March 1, up from $6,128 on Sept. 1, 2010.

Combining the 19.7 percent increase with the 5.7 percent increase reported in September indicates a statewide average increase of 25.4 percent for the year from March 1, 2010, to March 1, 2011. The estimates in the RLI survey were for bare, unimproved land with a sale price on a cash basis.

Troy Louwagie of Hertz Farm Real Estate Services in Mount Vernon said several factors continue to drive up the value of Iowa farmland.

“We have strong commodity prices, favorable long term interest rates, a limited amount of land offered for sale and a lack of alternative investments,” Louwagie said. “We also are experiencing higher livestock prices and there's fear of inflation.”

All nine Iowa crop reporting districts showed an increase. The districts varied from a 15.9 percent jump in central Iowa to a 26 percent increase in the west central district for the September through March period.

The value of an average acre of good farmland in east central Iowa, where Linn and Johnson counties are located, rose from $6,348 on Sept. 1 to $7,705 on March 1. In northeast Iowa, farmland values increased from an average $6,240 on Sept. 1 to $7,478 on March 1.