The value of an average acre of unimproved farmland in Iowa declined 1 percent from Sept. 1, 2018, to March 1 of this year, according to a new survey released Wednesday.
The Iowa Chapter of the Realtors Land Institute reported the value of an average acre of Iowa farmland was $9,157 on March 1, down from $9,239 on Sept. 1 of the year before.
Combined with a 1.7 percent decrease reported in September 2018 indicates a statewide average decline of 2.7 percent from March 1, 2018, to March 1, 2019.
The RLI survey follows an Iowa State University farmland values survey that reported a 0.8 percent decline in the value of an average acre of unimproved land from Nov. 1, 2017, to Nov. 1, 2018.
The Federal Reserve Bank of Chicago recorded a 1 percent dip from Jan. 1, 2018, to Jan. 1 of this year.
The value of an acre of east-central Iowa farmland slipped 1.3 percent to $10,041 on March 1 from $10,057 on Sept. 1.
Troy Louwagie of Hertz Real Estate Services in Mount Vernon said the continued decline is attributed to trade uncertainty, decreasing levels of working capital and slightly higher interest rates.
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“Interest rates are starting to affect us,” Louwagie said. “We are starting to see deposits paying 2 percent to 2.5 percent. We have not had an alternative in recent years.”
The RLI survey found 77 percent of farmland buyers are farmers, 18 percent are investors and the remaining 5 percent are other purchasers.
That compares with the ISU survey in November that found farmers were 72 percent of land buyers and investors accounted for 21 percent.
Farmland sellers are estates and trusts, farmers with an increase in land leased back for farming, investors trading assets and current operators selling to generate operating capital.
A survey of rural Midwest bankers by Creighton University released earlier this month found bankers are restructuring loans for farmers to shore up working capital.
Almost two-thirds of the rural bankers indicated that collateral requirements have been raised on farm loans.
That represents an increase from 45.2 percent of the bankers who were raising collateral requirements in a February survey.