A survey by Iowa State University Extension shows the value of Iowa farmland rose by 22 percent this year, the largest increase in more than two decades. ISU economist Mike Duffy conducts the survey and credits low interest rates and high grain prices. "For the last two years it’s been due to the ethanol demand," Duffy said.
The average value of farmland is at a record $3,908. Duffy says in four counties, land is now selling for more than 5000 dollars an acre. Those counties are Black Hawk, O’Brien, Scott, and Sioux. Scott County has the highest average in the state at just under $5,700 an acre.
The lowest priced land is located in Decatur County, at $1,828 per acre. Investors purchased 38 percent of the farmland in Iowa this year, while existing farmers bought 60 percent.
This is the fifth consecutive year of record high prices for land in rural Iowa. "So, there’s some concern and I think rightfully so," Duffy says, "one of the major negative things that I think is going to have an impact, and we need to be watching, is the higher cost of production. The costs of seed and fertilizer have gone up substantially and that cuts into profitability."
Since the beginning of this decade, average farmland values in Iowa have increased by more than $2,000 an acre. You can see the entire survey on the Iowa State University Extension Department website.