Decision Making in Today’s Farmland Market
December and early January are often the months when landowners, farmers, and investors pause to evaluate the year ahead. This is the season for big questions. Should land be sold or held? Is it time to buy? Do equipment trades make sense? How did taxes and profit shake out? Are changes needed in seed selection, fertilizer plans, or management practices?
At the same time, many landowners ask deeper questions about retirement, long-term planning, and legacy decisions. However, the most common question I continue to hear is simple and direct:
Will the land market stay steady?
To answer that, we need to look beyond emotion and focus on the data behind today’s decisions.
Key Positive Factors Driving Farmland Values
First and foremost, several strong fundamentals continue to support the farmland market.
For example, good yields and solid commodity prices have helped maintain strong net farm income. In addition, many landowners hold significant equity in existing farmland, which provides financial stability and flexibility.
Furthermore, farmland remains a proven long-term investment, especially during periods of economic uncertainty. As a result, buyer confidence remains intact, particularly for well-located, high-quality ground.
Challenges Impacting the Farmland Market
At the same time, there are headwinds that deserve attention.
Interest rates remain elevated and somewhat unstable, which can affect financing decisions. Moreover, higher 2023 input costs continue to compress margins for many operators.
In addition, an increased volume of farms coming to market, combined with drought concerns, supply-chain disruptions, and ongoing foreign conflicts, adds layers of uncertainty. Consequently, buyers are becoming more selective, especially when evaluating medium- and lower-quality ground.
My Perspective on Where the Market Is Headed
Recently, there has been discussion that interest rates could ease over the next eight months. While that remains to be seen, I have already observed a slight softening in medium-quality and lower-end ground.
That said, high-quality farmland with strong yield potential has remained remarkably stable. Location continues to matter. Simply put, farmland values are driven by what buyers are willing to pay. Therefore, strong neighborhoods continue to command strong prices, while weaker locations feel more pressure.
Overall, I remain bullish. The market has leveled off, but it is not retreating. I believe farmland values will remain steady through the 2023 planting season. After that, we could very well see another upward move.
Recent Iowa Farmland Auction Results
Looking at the most recent data reinforces this outlook.
Results from 219 auctions totaling 20,728 acres last month show:
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Statewide average: $12,318 per acre
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High-quality ground: $14,566 per acre
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Medium-quality ground: $9,690 per acre
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Low-quality ground: $6,061 per acre
These results confirm what we are seeing across the state: quality still matters, demand remains strong, and informed decision-making has never been more important.
Our Mission; Is to be your “Trusted Advisors”, Our obligation; is to market your farmland to the largest audience yielding you the most successful outcome!
David & Ann Whitaker | Iowa Land Guy
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Iowa Land Values by CSR Score: Green= 75-100CSR Tan=50-75CSR Orange= less than 50CSR
Farmland in Iowa by Acres Sold
Farmland Values in Iowa across the state
