Farmland Values Highest Since the 1940s

Farmland values highest since the 1940s

By Bethany Baratta, bbaratta@iasoybeans.com

High commodity prices, limited land supply and low-interest rates through the summer of 2022 helped push average Iowa farmland values up 17% over 2021 values.

Results from Iowa State University’s Land Value Survey, issued recently by ISU’s Center for Agricultural and Rural Development, show the average value of an acre of Iowa farmland rose 17% more than the past year to $11,411 per acre as of Nov. 1, 2022. All nine crop reporting districts in the state showed an increase in farmland values.

Record values

The 17% increase followed a 29% surge in the farmland values in 2021. The $11,411 per acre nominal land value is the highest since the 1940s.

The 2022 nominal land value is 31% higher than the 2013 peak in nominal land values, and the inflation-adjusted value, $9,088 per acre in 2015 dollars, saw a 9% increase and is also the highest on record.

The 2022 survey results are based on 668 county-level value estimates provided by 443 agricultural professionals, mostly ag lenders and broker/realtors. Started in 1941, the survey is the only one that provides estimates for all of Iowa’s 99 counties. The survey has been conducted by the Center for Agricultural and Rural Development in the Department of Economics at Iowa State University and Iowa State University Extension and Outreach since 2014.

Factors influencing growth

The continuing growth in value is supported by higher commodity prices, limited land supply and low-interest rates through the summer of 2022. Readily available cash and credit, stronger-than-expected crop yields, a good farm economy and strong demand for land, including from investors, were also factors.

Survey respondents noted concern about higher interest rates and input costs, stock market and economic uncertainty, weather and COVID concerns. In general, survey respondents were still optimistic about the strength of the future land market, with nearly half of respondents forecasting a continued increase in Iowa land values.

The most significant percentage increases were in the northwest and southwest districts, 22.3% and 22.2%, respectively.

The southcentral and southeast districts saw the smallest percentage changes and reported increases at or above 10%.

Across land quality classes, medium-quality land saw the most significant growth, 17.7%, while high- and low-quality land experienced 16.8% and 15.2% increases, respectively.

All 99 counties reported the highest nominal land values since 1950; for 66 counties, the inflation-adjusted values are also record-high — even higher than the previous peak in 2013. Mills, Fremont, Page, and Montgomery counties reported the largest percentage increases of 21.6%. Appanoose, Decatur, Lucas and Wayne Counties reported the lowest percentage increase of 10%.