A cornfield in eastern Iowa.
A survey from the Iowa Realtors Land Institute shows farmland values dropped almost 9 percent from a year ago.
Iowa’s average farmland value is now just under $6,500 an acre. In September of 2013, the average acre was worth $8,750.
Kyle Hansen, at Hertz Real Estate Services in Nevada says the decrease is tied to lower commodity prices. “We were down 8.7% on a state average for average quality tillable ground,” Hansen says. “A lot of that is just a continuation of what we’ve seen with the downward pressure due to the extended lower commodity prices. It’s really a continuation of what we’ve seen in the last 12 to 18 months.”
He says their projections indicate farmland values will continue on the down-swing for perhaps another year. “With the commodity prices staying low and it appears like we’re going to have a great crop this year, that would continue to keep prices low,” Hansen says. “We would anticipate an additional softening over the next six to 12 months just because of the lower revenue that is being generated by the farmers.” Hansen says the strongest farmland values in Iowa are still in the northwest, where there was a 3 percent decrease.
“Northwest Iowa is still the highest-priced farm ground in the state of Iowa,” Hansen says. “They have a lot of strength in the ethanol industry as well as in the years past, the higher revenue generated from livestock, primarily the beef cattle that are there.” He says the largest drop in farmland values was in southwest Iowa.
(By Jerry Oster, WNAX, Yankton)