Business

Farmland values rise in Eastern Iowa

Supported by investors, limited land is for sale

“I have way more buyers today than I had six months ago,” says Troy Louwagie of Hertz Real Estate Services in Mount Vernon. (Liz Martin/The Gazette)
“I have way more buyers today than I had six months ago,” says Troy Louwagie of Hertz Real Estate Services in Mount Vernon. (Liz Martin/The Gazette)

The average value of an acre of high quality Iowa farmland increased over the past six months, supported by strong investor interest and a limited amount of cropland on the market.

“I have way more buyers today than I had six months ago,” said Troy Louwagie of Hertz Real Estate Services in Mount Vernon. “In March, I expected the farmland market to crop 5 percent over the next six months because I felt it was a little overpriced.

“We have seen investor-buyers starting to purchase farmland again. I don’t know if people are a little nervous about the stock market and just want to park their money in farmland.

“We also continue to have a limited amount of land on the market.”

The Iowa Chapter of the Realtors Land Institute said an acre of high quality farmland was worth $9,239 on Sept. 1, up 0.8 percent from $9,163 on March 1.

Combined with a 1 percent decrease reported in March, the value of an average acre of high quality Iowa farmland dipped 0.2 percent between Sept. 1, 2018, and Sept. 1, 2019.

In east central Iowa, the average value of an acre of high quality cropland rose 1.8 percent from $10,081 on March 1 to $10,290 on Sept. 1.

The state’s nine crop-reporting districts showed variability in terms of average farmland value, ranging from a 1.2 percent decline in northwest Iowa to a 1.8 percent increase in east and north central Iowa.

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Louwagie said negative factors affecting farmland values going forward include an extremely tight ag economy with trade uncertainty, diminished working capital and variability in crop yields and weather patterns.

Despite all that, Louwagie said a Sept. 5 auction of four parcels of Cedar County farmland totaling 562.8 acres brought sales ranging from $9,800 to $12,300 an acre.

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