The Iowa Farm & Land Realtors have conducted a farmland value survey every March and September for the past 35 years. According to the latest survey results, Iowa experienced a statewide average decrease of cropland values of -5.4% for the September 2013 through March 2014. This offset a modest gain from March 2013 to September 2013 of 1.2%, for a yearly total of -4.2%.
Farmland values varied by as much as 40% across the state’s nine crop reporting districts, from highest land values in the northwest to the lowest values in the south central part of the state. Land classified as high quality was worth an average of $11,104 per acre, medium-quality ground was worth an average of $8,323 per acre and low-quality cropland settling in at a $5,432 per acre price tag.
The group pointed to several contributing factors, including lower commodity prices, higher input costs, increasing interest rates, government regulation uncertainty and low confidence in both the U.S. and world economy. Meanwhile, positive factors affecting farmland value include low interest rates, limited amount of land for sale, a strong livestock market, a renewed interest from investors, a lack of stable alternative investments, the amount of cash on hand and the fear of inflation.
The survey is conducted by asking participants to estimate the average value of farmland as of March 1, 2014. The estimates are for bare, unimproved land with a sale price on a cash basis.
A slight Iowa dip isn’t necessarily being seen across the Corn Belt, either. The Daily Nebraskan reports that Cornhusker land values saw a modest 5% increase during the past year. This is still dwarfed by a 25% gain in 2013 and a 22% gain in 2012, however.