Iowa farmland increased 32.6% in value

The value of cropland across the state of Iowa continues to be on the rise, along with high demand.

The Land Trends and Value Survey, presented by the Iowa Farm and Land Chapter #2 Realtors Land Institute, reported a statewide average increase of cropland values of 32.6% for the year from September 1, 2010 to September 1, 2011. This follows an average increase of 8.5% for the year from September 2009 to September 2010.

Farmland, timber and pasture land in our markets continue to be in great demand, said Tom Marcus, Realtor of Ruhl Farm&Land, a division of Ruhl&Ruhl Realtors.

“High quality cropland is in the most demand; but there is very little for sale,” Marcus said. “The demand for this type of land has caused the sale prices and land rent to skyrocket. If a farmer wants to continue to farm he or she has to have land to plant crops on or they are forced out of business. Prices for corn and soybeans have increased this year to where farmers can afford to pay more for rent and the purchase of land.”

Marcus added that the increase demand in pasture land has also impacted the market.

“The prices on feeder calves are at a very high level and it is now profitable for the cow calf operator to expand his herd,” Marcus said. “Cow numbers in the United States are at a level where we need to expand the cow herd inventory to keep up with demand. The overseas demand for beef is very good, so if exports hold steady or increase this bodes well for the US cattle producers.”

The survey attributed the increase to several contributing factors, including strong commodity prices, favorable long-term interest rates, limited amount of land offered for sale, lack of alternative investments, higher livestock prices and fear of inflation.

For the survey, participants are asked to estimate the average value of farmland as of September 1, 2011. These estimates are for bare, unimproved land with a sale price on a cash basis. Pasture and timberland values were also requested as supplemental information. All nine Iowa crop reporting districts showed an increase.

Marcus added that he expects landowners will continue to reap the benefits.

“With high grain and livestock prices, and relative cheap interest rates, I would expect to see land prices to remain high,” he said. “What other investment have such a good return at this time?”

Ruhl Farm&Land, a division of Ruhl&Ruhl Realtors, is focused on the sale, purchase and marketing of land, farms and acreages. For more information, visit their website at

www.RuhlFarmandLand.com.