As we move toward spring, a healthy amount of farmland will continue to come to market. We are seeing sellers and real estate companies work aggressively to accelerate listings in order to capitalize on today’s strong land prices.
Now that the dust has settled on 2021, farmland values continue to move forward. While prices may level off or move sideways at times, we do not expect them to move backward. Much like other asset classes, once the market adjusts, a new baseline value is often established.
At the same time, the federal government has begun raising interest rates. Because of this, many investors are looking to hedge against inflation by shifting capital into farmland. In our view, changing interest rates will likely have a greater impact on the residential housing market than on farmland.
The key question moving forward is whether farmland sales will continue to flow into the market or begin to slow as rates increase. Ultimately, only time will tell how interest rate changes affect land values and transaction volume.
Understanding What Your Farmland Is Worth
If the market shifts, sellers must remember one fundamental truth: farmland is worth what a buyer is willing to pay, not necessarily the price quoted in an article or headline. Every farm is different, with its own location, characteristics, opportunities, and challenges.
Recent Iowa Farmland Sales Results
Results from 68 farmland sales totaling 7,665 acres over the past month show the following statewide averages:
- Statewide average: $10,355 per acre
- High-quality farmland: $13,601 per acre
- Medium-quality farmland: $8,425 per acre
- Low-quality farmland: $5,184 per acre
Why Strategy Matters More Than Ever
Just as farm equipment, technology, and inputs continue to evolve, so do farmland values and the way land is marketed. Your farmland is likely your most valuable asset, and it should not be entrusted to just anyone.
If you are considering selling, now is the time to understand your options. Contact us today to learn what your farm is worth and receive a free land valuation.
David & Ann Whitaker | Iowa Land Guy
When you think of farmland, think of us.
