Double-Digit Gains Cited In Iowa, Nebraska Land Values

Published on: 15:43PM Jan 11, 2011

Mike Walsten

The value of Iowa and Nebraska farmland rose 16% and 10%, respectively, the last half of 2010, according to the twice-a-year update conducted by Farm Credit Services of America (FCSAmerica), Omaha. FCSAmerica serves 85,000 agricultural producers in Iowa, Nebraska, South Dakota and Wyoming and is the largest real estate lender in those four states. Jim Knuth, senior vice president, says FCS America's appraisal team of more than 65 updates the value of 67 benchmark farms located in its service area every six months. It has analyzed more than 31,600 sales completed in its service area (including nearly 13,700 sales in Iowa) the past five years.

The update shows the value of Iowa farmland rose 16.4% during the last half of 2010, while posting an annual gain of 20.3%. Nebraska, meanwhile, recorded a gain of 9.7% the last half of 2010 and an increase of 12.1% for the year. South Dakota farmland increased 4.9% the final six months of 2010 and gained 9% for the year. Wyoming, meanwhile, reported a decline of 1% for the last half of 2010 and registered a slight 0.5% increase for the year. The weakness in Wyoming values versus values in the other three states underscores the strength in demand for high-quality cropland. Iowa has plenty while Nebraska and South Dakota have lesser amounts -- hence the lower percentage increases seen in each. Wyoming, meanwhile, is primarily a grazing state -- more heavily dominated by investors interested in vistas, hunting and cattle. That market still remains soft.

Farmers continue to dominate the marketplace, although not quite as heavily as in the past few years, Knuth notes. FCSAmerica's update found 73% of all buyers were farmers and ranchers, down somewhat from 77% in 2009 and 82% in 2008. Local investors accounted for 12% of all buyers in 2010 compared to 11% in 2009 and 8% in 2008. Out-of-area investors were 12% of all buyers in 2010 compared to 8% in 2009 and 7% in 2008. "While down somewhat from 2009 and 2008 levels, farmers and ranchers are still nearly 75% of buyers and the prime drivers of the market," says Knuth.

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