The annual Iowa State University extension department farmland survey released last week showed a fourth straight record high for values.
Economist Mike Duffy says the increasing value of the land could change some people’s ideas about land ownership. The survey found about 17-percent of landowners — about 10-percent of the land — hold onto the farm ground for “sentimental reasons.” Duffy says we may reach a point where sentimentality will reach its price and we may see land sold that wouldn’t normal be sold.
The survey showed the high price of corn brought on by the increased production of ethanol is the top factor in pushing up land values. Duffy says the whole ethanol impact is something he’s watching closely. “It’s very much and interesting time. I think that this whole ethanol boom in the corn market has started a domino effect of possible changes with respect to export markets, the livestock sector, the soybeans,” he says. “What’s going to happen in the infrastructure as we try to produce more corn, as far as fertilizer availability, storage availability? What’s going to happen with respect to feeding?”
Duffy says all these things could have an impact on land values in the future as there’s just a whole variety of issues and things that contribute to the uncertainty. The latest survey found the average value for an acre of farmland was $3204.