Farmland prices in Iowa hit a record high for the fourth straight year in the Iowa State University survey released earlier this month. ISU economics professor Mike Duffy, who conducts the survey, says farmers have recently become bigger players in the land sales. “Seventy-seven percent of the land was bought by existing farmers and about 18-percent by investors. Five to seven years ago, the existing farmers were only about 55-percent of the purchasers,” Duffy says.
Duffy says producers have looked to expand their holdings as they make more off the ground. “Farm income has been at record levels, and when incomes are high, farmers will tend to bid it into land,” Duffy explains. And as farmers age, they want to keep the land in their family. “What we’ve found is that 30-percent of the land is owned by people over 75,” Duffy says, “and the major intention is to get the land to the family, in some cases either by sale or by gifting.”
Commodity prices have dropped recently, but Duffy doesn’t expects big changes in land ownership patterns. “I think what we’re going to continue to see is about the same level of land being sold, which is about one-and-a-half percent of the land in a year. The other two-and-a-half percent is going to be transfered to the family through inheritance or something like that,” according to Duffy.
The survey found the average price for an acre of land in 2013 was $8,716, which was up five percent.