New record: Iowa farmland values jump 29 percent
By JARED STRONG
Iowa Capital Dispatch
Farmland prices in Iowa reached a new high this year of about $9,750 per acre, according to Iowa State University’s annual Farmland Value Survey.
Higher commodity prices, favorable interest rates and strong yields were the primary driving forces behind an uptick in land sales, the survey revealed.
However, the state’s agricultural land in 2013 was more valuable when adjusted for inflation. That year, the survey said an acre was worth about $8,700. That is the equivalent of about $10,400 in today’s dollars, according to the U.S. Bureau of Labor Statistics’ inflation calculator.
“The inflation-adjusted values are still less than the values for 2012 and 2013,” said Wendong Zhang, an associate professor of economics at Iowa State. “However, this is very, very significant. … The last time we have seen the land value changes increase close to or higher than 30% was in 2011.”
In absolute dollar figures, the average price for the state’s farmland is up 29 percent from 2020, when an acre was valued at about $7,560.
Greene County’s average farmland value is priced at $10,603 per acre, nearly $1,000 above average. Neighboring counties of Carroll ($11,394), Calhoun ($11,897), Webster ($11,323) and Boone ($11,177) all post values in the $11,000 range while Guthrie County, just to the south of Greene County is valued at $9,226 per acre. In fact, west central Iowa witnessed the second-highest increase in land value, up 33.1 percent from the previous year. Only north central Iowa saw a bigger jump at 34.5 percent.
Greene County’s average per-acre value increased by more than $2,000 in 2021, up from $8,336 the year prior.
Scott County in eastern Iowa boasts a state-high average of $13,852 per acre. Sioux County ($13,701) and O’Brien ($13,713) in northwest Iowa join Scott as the only three counties in the state to surpass an average value of $13,000.
The increase in value was aided by a number of different factors, including low interest rates, better-than-anticipated crop yields, an increase in demand and an uptick in land availability.
The latest figures were derived from the survey responses of 455 agricultural professionals throughout the state. Researchers combined that information with U.S. Census of Agriculture data to determine county land values.
Those land values are highest in far northwest Iowa and lowest in far southern Iowa. Seventy-four percent of farmers who responded to the survey said they experienced better sales numbers than in 2020, the highest mark since Iowa State University began recording the information in 1986.
About two-thirds of this year’s land sales were to existing local farmers, the survey found. Investors represented about a quarter of the buyers, and new farmers accounted for about 4 percent.