Survey Shows Iowa Farmland Values have Fallen Since 2014

After many years of increases, a new survey shows the value of Iowa farmland is dropping. The report from the Iowa Realtors Land Institute compared land prices from March 1st of 2014 to March 1st of this year. Institute spokesman Kyle Hansen, of Nevada, says statewide land values fell by an average of 11-percent, though cropland values didn’t drop quite as far.

“We actually saw a decrease of 7.6% across the state on all tillable acres,” Hansen says. “We’ve seen anywhere from a 30 to 40% reduction in our commodity prices, our corn and soybeans, over the last 12 to 18 months and that has now definitely influenced the land market.”

Based on the survey, Hansen says they expect land values to continue dropping from their recent record highs. He says, “We do believe the land market will continue to soften for the next six to potentially 12 months based on what happens with the commodity prices and our 2015 production.”

From the standpoint of younger producers who are trying to get into the business, Hansen says the land price drop is welcome.

“It’s not a good thing when prices keep going up,” Hansen says. “It’s good to see that the land values are still connected to the commodity prices and what the net revenue is for the farmers and that it does fluctuate accordingly to those prices.”

Hansen says factors contributing to current Iowa farmland values include lower commodity prices and the limited amount of land on the market, as well as a lack of stable alternative investments, cash on hand and rising interest rates.