Iowa Farmland Values – Realtor Land Institute
The results are in! The survey show a statewide average increase of cropland values of 2.0% for the March 2017 to September 2017 period. Combining this increase with the 0.90% increase reported in March 2017 indicates a statewide average increase of 2.9% from September 1, 2016 to September 1, 2017. This survey shows the first full year statewide increase in land values since 2013, indicating some current stability.
All but one of the Iowa crop reporting districts showed an increase in the average farmland value. The districts varied from a -0.5% decrease in SC district to a 3.6% increase in NE district since March 2017.
Major factors contributing to current farmland values include: lower commodity prices, limited amount of land on the market and growing conditions in the regions. Other factors include: lack of stable alternative investments, cash on hand, and increasing interest rates.
April 1, 2017 – July 1, 2017 2.0%
July 1, 2016 – July 1, 2017 3.0%
USDA – Cropland
August 1, 2016 – July 31, 2017 1.3%
Land values are starting to stabilize/increase, but sales have been volatile
Negatives for Land Market
- Continued Lower Commodity Prices
- High input costs – even though lower than last year
- Potential Long term interest rates increasing – still favorable
Positives for Land Market
- Farmers still have some cash on hand/equity
- Must be perfect farm for their operation to spend available cash
- Still limited amount of land for sale
- Volume starting to increase
- Farmers are primary buyers
- Investors are buying
- Recreational buyers are active
Future is uncertain and will depend on commodity prices, yield, and volume of land on the Market