Mike Duffy talks about the 2010 farmland survey.
The latest Iowa State University Extension farmland survey shows only one region of the state did not report double-digit increases in value. I.S.U. extension economist Mike Duffy talked about the results of the survey today.
The survey found values are up 15.9%, to an average price per acre of $5,064. Duffy says it’s a “pretty substantial increase.”
The increase comes following a 2.2% decrease in land values last year. Duffy says northwest Iowa had the highest values at $6,356 an acre up an average of 18.5%, with the high grade land over $7,000 an acre.
Duffy says the survey found counties averaging over seven thousand dollars an acre for the first time, with O’Brien and Sioux County each hitting that mark. O’Brien County had the highest average value at $7,148 an acres. Duffy says it’s worth mentioning that this is the first year since 1977 that Scott County has not been the top county for land values.
Duffy says the influence of the I-29 corridor is part of the reason for the value increases in the northwest. The south-central district saw the lowest increase at 6%. Duffy says it was the only crop reporting district that didn’t increase by double digits. He says the weather in the area could have been a factor as the corn yield projections are 98-bushels an acre — or 36% lower than last year.
Duffy says high commodity prices were one of the top reasons given in the survey for the increase in land values. Duffy says monthly corn prices from July through November are up over a third what they were from January to July. He says over half the people in the survey mentioned low interest rates as a reason for higher prices.
Duffy says his personal feeling is that the commodity prices and historically low interest rates are driving up prices along with big demand and limited availability — which indicates this is not the same type of speculative bubble in land values that happened in the 1970’s.
See the entire survey on the I.S.U. Extension website here: www.extension.iastate.edu/landvalue