The value of Iowa cropland rose 12.9% from March to September, according to the semi-annual survey conducted by the Iowa REALTORS Land Institute. Combining that 12.9% increase with the 19.7% increase reported in the RLI's March survey indicates a statewide average increase of 32.6% for the year from Sept. 1, 2010 to Sept. 1, 2011, says the Iowa RLI. Kyle Hansen, ALC, Hertz Real Estate Services and survey chair, says the 32.6% yearly gain is the largest percentage increase or decrease since the survey was created in 1978.
All nine Iowa crop reporting districts show an increase, Hansen says. The district increases ranged from 8.5% in southeast Iowa to 17% in northeast Iowa during the six-month period ending September 1. The highest-valued cropland is in the northwest crop district, according to the survey. That district lists an annual value of $9,685 per acre for high-quality cropland. That is followed by the west-central district's $9,085 per acre for high-quality cropland. Five crop districts report an average value in excess of $8,000 per acre for high quality cropland. The southwest district reports an average value of $7,555 per acre for high-quality cropland and the south-central district lists an average value of $6,300 per acre for high-quality farmland. The statewide average value of high-quality cropland is $8,330 an acre, according to the survey.
The statewide average value of medium-quality cropland is $6,477 per acre and the state average value of low-quality cropland is $4,588 an acre, according to the survey. The survey also pegs the statewide average value of an acre of non-tillable pasture land at $2,309 an acre, up 5% for the six-month period. The statewide average value of an acre of timber land is $2,019 per acre, up 2.7% for the six-month period.
Survey respondents cite the following as contributing to the increase in farmland values: strong commodity prices, favorable long-term interest rates, and limited amount of land offered for sale. Other factors also include: lack of alternative investments, higher livestock prices and fear of inflation. Concerns that could affect farmland values in the future include: higher input costs, increase in interest rates, larger amounts of land being offered for sale and continued uncertainty of the U.S. and world economy.
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