Iowa Farmland Prices Nearly 2 Percent Higher, but Lower Ag Profits Still Pressure Prices01/24/2018
Iowa’s farmland values ticked slightly higher over the past year, even with lower sales activity, a new report shows.
Average farmland values were 1.8percent higher over the past year, based on sales data and appraisals of 21 Iowa farms used as benchmarks by Farm Credit Services of America in Omaha.
Despite the increase, Iowa’s benchmark farmland values are still nearly 13 percent lower than five years ago, due to declining corn, soybean and other commodity prices.
The report echos findings from Iowa State University in December, showing average farmland values climbed 2 percent to $7,326 an acre.
Farm Credit Services said the average benchmark values were 2.8 percent lower in Nebraska and down 3.1 percent in South Dakota.
Wyoming’s benchmark values increased by 3.2 percent.
Overall, Iowa’s farmland sales activity was down 20 percent, the ag financing group said.
Public land auctions in the state increased 2 percent compared to the previous year, Farm Credit Services said.
“No sales” auctions fell to 2.7 percent last year in Iowa from 3.2 percent in 2016.
Farm Credit Services compiles sales records and, twice a year, appraises 64 benchmark farms in the four states to determine its average farmland values.
“Overall real estate values have stabilized in the past year, but continued low profit margins and potential for an increase in sales activity could put downward pressure on real estate values,” said Tim Koch, Farm Credit Services chief risk officer.
Farmland values remain well below the market’s peak of three to four years ago.
Source: Donnelle Eller, Des Moines Register