Farmland values rise despite turbulent year
The average acre of farmland in Iowa, the top corn-growing state, is worth $7,559, an increase of 1.7% from 2019, despite the effects of the pandemic and the accompanying economic slowdown, said Iowa State University on Tuesday. It was the second year in a row of modest increases, but land values remain $1,157 below their 2013 peak hit during the commodity boom.
Assistant professor Wendong Zhang said large government payments, low interest rates, a rally in commodity prices and the limited supply of land on the market resulted in higher land values. In nearly three of every four sales this year, the buyer was a farmer. The estimate of land values is based on an annual ISU survey of real estate brokers, farm managers, lenders, appraisers, county assessors, and other experts.
Farmland values also rose in Indiana this year and could increase again in 2021, said economist Todd Kuethe in a quarterly Purdue University newsletter. Like Zhang of ISU, Kuethe said low interest rates, the limited amount of land for sale, and “the current economic certainty” felt by farmers bolstered land values.
The Iowa Farmland Value Survey is available here.