Iowa farmland values still falling

CEDAR RAPIDS - The average value of a tillable acre of Iowa farmland continues to decline in the face of lower corn and soybean prices and the prospect of higher interest rates.

A survey released Wednesday by the Iowa Chapter of Realtors Land Institute showed the value of an average acre of tillable land declined 3.7 percent from March 1 to Sept. 1. Over the last 12 months, the value of an average acre of tillable farmland fell 11.3 percent, according to the survey.

Higher quality land showed a decline from an average $9,904 an acre on March 1 to $9,531 on Sept. 1.

The average value of an acre of medium quality Iowa farmland declined from $7,378 at the beginning of March to $7,054 six months later, and lower quality farmland slipped from an average $4,809 to $4,699.

The institute adds the average value of each category of land quality and divides by three to determine the average overall value and percentage of increase or decrease.

All nine Iowa crop reporting districts showed a decrease in the average farmland value.

Troy Louwagie of Hertz Real Estate Services in Mount Vernon was not surprised by the survey results.

'I think everyone is waiting to see what our yields are this year and what commodity prices are going to do,” Louwagie said.

Don Roose of U.S. Commodities in West Des Moines said farmland values likely will continue to slip as commodity prices remain depressed and interest rates are expected to rise.

'Two things caused farmland values to increase,” Roose said. 'Interest rates moved down to where it was very attractive long term. Those are starting to make a move.

'The other thing was grain prices moving up sharply because we had new demand hit the market in the form of ethanol. The value of corn has roughly been chopped in half from peak numbers and it seems like we are settling into world range where this is the norm.”