March is here, and with it comes the push toward planting season. Over the past month, the Iowa farmland market has experienced several moving parts that continue to shape buyer and seller behavior.
Notably, Iowa sold more acres in February 2022 than in February 2021—a year that was already considered strong. Since January, we have closely monitored farmland prices across the state to gauge where the market may head in 2022. So far, the trend remains steady to stronger.
Market Influences Heading Into Spring
In addition, global events are influencing agricultural markets. The conflict in Ukraine has contributed to rising commodity prices, which in turn impacts farmland values. As we have said before, markets are driven by emotion. When conditions are favorable, confidence rises. However, uncertainty can quickly create volatility.
As this situation develops, we continue to watch how China responds and how European markets react, as both play an important role in global trade and agricultural demand.
Farmland Ownership Is Transitioning
At the same time, we are receiving an increasing number of calls from heirs who own farmland and want to take advantage of current market trends. With approximately 35.7 million acres of farmland in Iowa—and an estimated 10% changing hands each year—the stage is set for significant activity.
As the Baby Boomer generation continues to transition, one of the largest transfers of farmland wealth in history is beginning to unfold. Some families will keep the land, while others will choose to sell.
Key Factors Shaping the Iowa Farmland Market
While no one has a crystal ball, several facts continue to influence farmland prices and market behavior:
- Heirs are becoming further removed from day-to-day farming operations.
- A major generational transition is underway.
- Commodity prices remain high.
- Input costs are increasing, narrowing margins for 2022.
- Interest rates are rising, although they remain historically low.
- Significant equity exists in currently owned farmland.
- Investors are hedging against inflation by purchasing farmland.
- 1031 exchange timelines are driving land trading activity.
- Fuel prices continue to rise.
- Government policy may impact ethanol demand.
- Most farmers experienced profit in 2021.
- Foreign conflict is affecting global grain supply.
- Foreign trade continues to influence agricultural markets.
Recent Iowa Farmland Sales Results
Results from 78 farmland sales totaling 8,605 acres over the past month show continued strength across the state:
- Statewide average: $11,193 per acre
- High-quality farmland: $13,942 per acre
- Medium-quality farmland: $8,331 per acre
- Low-quality farmland: $6,275 per acre
Our Commitment to Iowa Landowners
Our mission is to serve as your trusted advisors. Our obligation is to market your farmland to the largest possible audience while delivering the most successful outcome.
David & Ann Whitaker | Iowa Land Guy
When you think of farmland, think of us.
