The Perfect Storm: What Is Driving Iowa Farmland Values?
Over the past 12 months, Iowa farmland values have increased rapidly. Rather than one single factor pushing the market, it has been a perfect storm of multiple forces coming together at the same time.
Multiple Factors Fueling Rising Farmland Prices
The chain reaction began with COVID, when farmers received MFP payments, followed by PPP funding. At the same time, China was recovering from a swine flu outbreak and began purchasing significantly larger volumes of U.S. corn and soybean crops.
Additionally, an administration change added uncertainty around proposed changes to how farmland is transferred from one owner to the next, which caused many landowners to take action sooner rather than later.
As commodity prices increased, land values followed. From January through April, fewer acres were sold compared to the same period in 2020, which created a supply issue. Combined with historically low interest rates, these factors drove Iowa farmland values up 26.6% year over year.
Farmland Sales Activity Continues to Accelerate
Since May, however, more acres have sold each month than during the same period in 2020 — totaling 48% more acres sold year to date.
Will Iowa Farmland Values Remain Strong?
Is this the new normal? Will land prices continue to hold?
Over a lifetime, the cost of bread, vehicles, and housing has steadily increased. Meanwhile, those prices have not returned to previous levels. Farmland may experience ups and downs on a micro level, but ultimately, there is little indication of a sustained downward trend for Iowa farmland values.
As demand continues, we may see fewer auctions and acres offered over time, especially for what many view as the best investment on earth: farmland.
Recent Iowa Farmland Sales Results
Statewide Averages From the Past Month
Based on 158 farmland sales totaling 17,902 acres last month, statewide pricing averages are as follows:
- Statewide Average: $11,107 per acre
- High-Quality Land: $13,552 per acre
- Medium-Quality Land: $8,772 per acre
- Low-Quality Land: $6,345 per acre
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David & Ann Whitaker | Iowa Land Guy
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Average month-over-month Iowa farmland values per acre, illustrating a steady upward trend in prices throughout 2021.
Iowa farmland values by crop reporting district, highlighting average price per acre and price per CSR2 from May through October 2021.
Comparison of Iowa farmland acres sold per month in 2021 versus 2020, highlighting increased sales volume throughout much of the year.
