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DES MOINES — The price of tillable farm land in Iowa increased by 18.8 percent over the past six months, with a statewide average of $12,182 per acre compared to $10,221 last March, according to a semi-annual survey real estate agents released Wednesday.
The September survey by the Realtors Land Institute Iowa chapter indicated that the year-over-year increase totaled 26.6 percent for the state when coupled with the 7.8 percent rise reported last March, according to RLI spokesman Matt Vegter.
“That’s pretty hefty for Iowa ag land,” said Vegter, who noted the latest Sept. 1 value increases ranged from 14.2 percent in the northwest district to 22.5 percent in northeast Iowa. “Things are changing very rapidly.”
The only previous time the survey of participants who specialize in farm and land sales, management, development and appraisal was higher was a 19.7 percent increase in March 2011, according to survey overseers.
They stressed the importance of focusing on percentage changes rather than dollar figures that can vary considerably based on soil quality and other factors when estimating the value of bare, unimproved land with a sale price on a cash basis.
The east-central district, which includes Linn and Johnson counties, increased 21.9 percent.
“These results will come as no surprise, as record auction prices in many counties have been making headlines this summer,” according to the institute news release. As an example, an 80-acre parcel in Sioux County sold at auction last October for $21,900 per acre.
Timber and pasture acres showed similar strength in Wednesday’s RLI land trends and values report, with timberland values up an average of 15.9 percent and the value of pastureland posting a 14.1 percent increase.
RLI officials pointed to low interest rates, favorable commodity prices and expectations of “fairly good” crop yields as the 2021 harvest gets underway in Iowa as positive drivers behind the surging farm land values.
Negatives that could be drags on values are potential capital gains and other tax policy changes, inflation risks and an increased amount of farm land being offered for sale, Vegter noted.
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