Iowa farmland values fall 8.9 percent

The value of an average acre of Iowa farmland is estimated to be $7,943, a drop of $773, or 8.9 percent over the last year, according to a survey by the Center for Agricultural and Rural Development at Iowa State University.

Mike Duffy, a retired ISU economics professor who conducted this year's survey, said while this year marks the largest decline in farmland values since 1986, it is only the second year since 1999 that the survey has shown a decline in farmland values.

After hitting a historic peak in 2013, Duffy said values have returned to a mid-point between 2011 and 2012 values. In spite of the decrease, farmland values are more than double what they were 10 years ago, 81 percent higher than 2009 values, and 18 percent higher than 2011 values.

'I think we have seen a peak for the time being,” said Duffy, formerly an extension farm management economist. 'Commodity prices and farm income are settling back to more expected levels, and I think land values will probably move sideways for a while.

'Many people think this report indicates the beginning of another farm crises, but land values are still considerably higher than they were just a few years ago.”

Scott County reported the highest value at $11,618 per acre, but prices declined about $795 per acre, or about $22 per acre more than the statewide average.

'Scott County typically has the highest value primarily due to its location on the (Mississippi) river and good soil,” Duffy said.

The largest decrease in farmland value was in southwest Iowa, which reported a drop of 13.5 percent.

The value of all grades of farmland fell, with high-grade farmland taking the largest hit and losing 9 percent ($974 per acre) of its value.

'The reason high-grade farmland fell in value faster than low- or medium-grade farmland is because it had increased in value faster over the past few years,” Duffy said.

The only crop reporting district to show an increase in values was southeast Iowa, which reported values 3.2 percent higher than last year.

Duffy noted that the survey results were similar to those conducted earlier this year by the Federal Reserve Bank of Chicago and the Iowa Chapter of the Realtors Land Institute.