The value of Iowa farmland barely increased the past six months, confirming what we've been telling subscribers to LandOwner Newsletter the past several months. According to a semiannual survey of farm real estate professionals conducted by the Iowa Chapter of REALTORS Land Institute, the value of an acre of Iowa farmland rose a scant 1.2% between March 1 and Sept. 1. Combining that increase with the 9.4% gain reported in March for the previous six months, the value of an acre of Iowa farmland rose 10.6% from Sept. 1, 2012 to Sept. 1, 2013.
The nine crop reporting districts showed a mixed response for the just-completed six-month period. The districts varied from a 5% increase in the East Central district to a 0.7% decrease in the Northeast district since Mar. 1. Changes reported by district were: Central, up 1.1%; East Central, up 5%; North Central, up 1.7%; Northeast, down 0.7%; Northwest, up 0.8%; South Central, up 2%; Southeast, up 2.8%; Southwest, down 0.5%; and West Central, down 0.5%.
The steep decline in commodity prices coupled with the "extremely tough growing season" are the two primary factors behind the limited gain in Iowa farmland values, states RLI President and survey coordinator Kyle Hansen, ALC, Hertz Real Estate Services, Nevada, Iowa. In addition, the bulk of the farmland recently available to the market has been medium- to lower-quality farm ground, categories of farmland that traditionally sport a weaker level of demand. "There is still strong demand for high-quality farmland," Hansen says, "but there is very little high-quality farmland available to the market."
Over the past six months, the value of an average acre of high-quality cropland rose 2%, the value of medium-quality cropland increased 1% and the value of low-quality cropland remained unchanged, according to the survey. In addition, the value of non-tillable pasture rose 1% and the value of timber land declined 1%.
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