A 74-acre piece of farmland in northwest Iowa’s Sioux County sold this week for almost 1.5 million dollars. That works out to $20,000 an acre, Iowa’s highest price ever paid for farmland. The previous record was set earlier this fall at just under $17,000 an acre, also in Sioux County.

Iowa State University ag economist Mike Duffy says good commodity prices and a strong livestock industry are factors in the higher prices. “Even though commodity prices are off a little, relative to what they had been, they’re still strong,” Duffy says. “People are looking to expand. They’re looking to get a hold of land.”

Duffy says there’s no doubt many buyers are purchasing land with cash rather than on credit. He says that’s leading to concern about a speculative bubble like in the recent housing market slump or in the ag market back in the late 1970s.

“A big difference is, we aren’t seeing the debt being taken on,” Duffy says. “We are having some hidden debt coming along in the form of deferred tax liabilities or things like that, but still, a lot of these are cash on the barrelhead.”

A survey of real estate agents in September put the statewide average at $6,477 an acre, an increase of more than 30% in the last year. I.S.U. will release its annual farmland survey next week.

By Jerry Oster, WNAX, Yankton