Iowa farmland tops $10,000/acre
Iowa farmland is now, on average, worth $10,000/acre.
A year ago, farmland values were climbing at a double-digit clip in Iowa. While that's still true in parts of the state now, the climb has dipped as experts continue to speculate whether factors, both macroeconomic and ag-specific, are continuing to turn the tide in a market that's seen nothing but upside the last few years.
High-quality crop land ranged from over $10,000/acre for the first time since the Iowa Chapter #2 Realtors Land Institute (RLI) has kept track of land values, according to the most recent RLI survey released recently. The west-central and northwestern parts of the state led the charge, with values of $11,475 and $11,908/acre, respectively. The southwestern part of the state, which saw values jump from $8,823 to $10,083/acre, saw the largest rate of gain at 10.8%, the survey shows.
"The results of the survey show a statewide average increase of 7.7% for cropland during the March 2012 to September 2012 time frame. This, in combination with the previously reported 10.8% increase during the spring months, gives a statewide average increase of 18.5% for the year," says Cannon Clark, business development specialist with Peoples Company, a land brokerage firm based in West Des Moines, Iowa. "The statewide average for high quality crop land is now $10,445 per acre, the highest it has ever been since the survey was begun in 1987."
Though the numbers are still trending higher, Clark says a few variables are starting to slow the rise in values. The recent survey conducted with land brokers shows that concerns about factors both local to agriculture and on a macroeconomic level are keeping values from climbing at a steeper clip.
"RLI stated contributing factors being strong commodity prices, favorable long term interest rates, and a limited supply of land currently on the market," he says. "Different concerns that were brought up among several of the experts included higher input costs, a possible increase in interest rates, and continued uncertainty of the U.S. and World economy."