Your Precious Land
Mike Walsten has covered major business trends in agriculture for more than 40 years.
Survey: Iowa Farmland Up 11% in Past Six Months
Mar 15, 2012
The value of Iowa farmland rose 10.8% between September 2011, and March 2012, according to a survey conducted by the Iowa Farm and Land Chapter #2 REALTORS Land Institute (RLI). Combining that 10.8% increase with the 12.9% gain reported in September for the March-September period indicates a statewide average increase of 23.7% for the year ending March 1, 2012.
All nine Iowa crop reporting districts showed an increase for the most current six-months. The increases varied from a 9.0% increase in the northeast district to a 12.9% gain in the southwest district. Gains by district are: central, 10.5%; east central, 9.4%; north central, 12.6%; northeast, 9%; northwest, 11.6%; south central, 11%; southeast, 9.1%; southwest, 12.9%; west central, 11.1%.
The survey pegged the statewide average value of an acre of high-quality cropland at $9,370 an acre; medium-quality cropland at $7,148 an acre; low-quality cropland at $4,879; non-tillable pasture at $2,418 an acre; and timber at $2,064 an acre.
The most expensive high-quality cropland, according to the survey, is located in the northwest district, which lists an average of $10,656 an acre. The least expensive high-quality cropland, according to the survey, is located in the south-central district, which reports an average of $7,089 an acre. The south-central district is the only district to report an average value for high-quality cropland at less than $8,000 an acre. In addition to the northwest district, the west-central district also lists an average in excess of $10,000 an acre for high-quality cropland -- $10,186 an acre. Four districts list an average value of between $9,000 and $10,000 an acre for high-quality cropland while two districts list an average value between $8,000 and $9,000 an acre for high-quality cropland.
Factors contributing to the increase in farmland values include: strong commodity prices, favorable long-term interest rates and limited amount of land offered for sale. Other factors include: lack of stable alternative investments, livestock prices and fear of inflation. Concerns that could affect farmland value in the future include: higher input costs, increase in interest rates, larger amounts of land being offered for sale, lower commodity prices and continued uncertainty of the U.S. and world economies.
The Iowa RLI has conducted the survey since 1978.
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