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Iowa Farmland Value Grows 2.3% in 2019

A news release Wednesday from the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach indicated that, “It’s been a difficult year for farmers—the planting season saw an overabundance of rain and delayed planting, the United States’ trade war with China persisted, skewing both commodity prices and demand, and farm bankruptcies rose to the highest level since 2011. However, favorable interest rates, strong yields, and limited land supply combined to help drive Iowa’s farmland values up for only the second time in six years.

“The statewide value of an acre of farmland is now estimated to be $7,432, which represents an increase of 2.3 percent, or $168, since 2018. The $7,432 per acre estimate, and 2.3 percent increase in value, represents a statewide average of low-, medium-, and high-quality farmland.”

2019 Iowa State University Land Value Survey (December 11, 2019).

The release noted that,

‘The reprieve in the land market, unfortunately, is not driven by a much stronger farm economy,’ said Dr. Wendong Zhang. Zhang is an assistant professor of economics at Iowa State University and is responsible for leading the annual Iowa Land Value Survey.

“‘This recent modest increase in land values reflects a lower interest rate environment and slowly improving US farm income. However, we are still faced with significant uncertainty, especially the ongoing US-China trade war, which has significantly affected US agricultural exports, especially soybean exports, and lead to lower commodity prices and weaker farm income,’ Zhang said. Stronger than expected crop yields in Iowa, and continuing limited land supply helped contribute to the increase in land values, despite low commodity prices.”

2019 Iowa State University Land Value Survey (December 11, 2019).

In a more detailed overview of the Survey, Dr. Zhang pointed out that, “This modest increase, which barely exceeds the pace of inflation, is the second rise over the past six years, but still represents a 15 percent decrease from the 2013 peak in nominal land values, or a 23 percent drop in inflation-adjusted values.”

2019 Iowa State University Land Value Survey (December 11, 2019).

“At the same time, the magnitude of this rise is still very modest and represents an overall stable land market as opposed to one in rapid rebound,” Dr. Zhang said.

2019 Iowa State University Land Value Survey (December 11, 2019).

The update added that, “Eighty-two of 99 counties in Iowa reported a rise in land value, while the remaining 17 counties saw a decline.”

2019 Iowa State University Land Value Survey (December 11, 2019).

The analysis of the results also pointed out that, “The majority of farmland sales, 52 percent, were from estate sales, followed by retired farmers at 24 percent. Active farmers account for 16 percent of sales, while investors accounted for seven percent.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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