A news release Tuesday from the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach indicated that, “One year after skyrocketing 29%, the average value of an acre of Iowa farmland jumped another 17%, or $1,660, to $11,411 per acre. The nominal value of an acre of farmland is again higher this year than at any point since Iowa State University began surveying values in 1941. When adjusting for inflation, the 2022 average value surpasses the previous inflation-adjusted record value set in 2013 for the first time.”
“While the Federal Reserve has been raising interest rates, Zhang said that 81% of Iowa farmland is fully paid for, so the higher interest rates don’t always affect farmers’ land purchasing decisions.”
The release noted that, “For the second year in a row, all 99 of Iowa’s counties showed an increase in land values. However, for the first time in almost a decade, Scott County did not report the highest overall value. O’Brien County topped the list this year, reporting a 20.6% increase, or $2,818 per acre, to $16,531. Decatur County again reported the lowest value, though land values there increased 10%, or $505 per acre, to $5,566.”
“The most frequently mentioned negative factor affecting land values was interest rate hikes. Other noted factors included concerns about higher input costs and stock market volatility and economic uncertainty were the second- and third-most frequently mentioned negative factors.”
In a more detailed overview of the Survey, Dr. Zhang pointed out that, “In general, the results from the 2022 Iowa State University Land Value Survey are similar to the results from other surveys, which all continued the surging farmland market trends due to higher commodity prices and limited land supply. In November 2021, the Federal Reserve Bank of Chicago reported a 22% increase in Iowa‘s ‘good’ farmland values from October 2021 to October 2022. In September, the REALTORS® Land Institute reported an overall 16.9% increase in Iowa cropland values from September 2021 to September 2022. The US Department of Agriculture June Area Survey reported a 21.4% rise in Iowa‘s agricultural real estate values (land and building) from June 2021 to June 2022.”
The analysis of the results also pointed out that, “The majority of farmland sales, 57%, were from estate sales, followed by retired farmers at 21%. Active farmers accounted for 8% of sales, while local and non-local investors each accounted for 6%.”
