Iowa Farmland Values Edge Higher in 2020

Posted on 12/15/2020 10:50 AM

An average acre of Iowa farmland rose 1.7% from November 2019 to November 2020, according to an annual survey conducted by Iowa State University. The average statewide value of an acre of farmland is now estimated at $7,559. This modest rise is the third increase in Iowa farmland values over the past six years, and a second consecutive rise. The 2020 land value still represents a 13% decline from the 2013 peak in nominal land values, or a 22% drop in inflation-adjusted values.

The recent increase is largely attributable to record-level federal ad hoc payments, drastic cuts in interest rates by the Federal Reserve, recent surges in agricultural exports and commodity prices and limited land supply.

High-quality land averaged $9,068 per acre, a decrease of 0.1% or $10 per acre. High-quality land in five of nine crop reporting districts saw a modest increase, less than 2%, while east-central and southwest districts reported a decline of more than 2%. The west-central and south-central districts reported the largest gains in medium-quality land values, 5.0% and 4.4%, respectively.

Medium-quality land averaged $7,119 per acre, an increase of 2.6% or $181 per acre. While no districts reported a loss in medium-quality land, the southwest district reported only a nominal gain of $2 per acre.

Low-quality land shows the strongest gain at $5,078 per acre, a 6.7%, or $319 per acre, increase. Low-quality land in the northeast, west-central, south-central, and southeast districts all saw increases of 8% or more; however, low-quality land in the north-central district posted the only decline, a loss of 0.5%, for low-quality land.

Looking at the survey on a crop reporting district basis, the highest average land values were reported in northwest Iowa, $9,536 per acre. The lowest average land values were reported in south-central Iowa, $4,658 per acre. Land values across crop reporting districts saw an increase in general, with only the southwest district reporting a decline in land values of 0.9%. The largest percentage increases were in the west-central and south-central districts, 3.9% and 3.8%, respectively. The northeast and northwest districts also reported an increase of 2% or higher.

On a county basis, the highest value was estimated for Scott County, $10,659 per acre. The lowest value was in Decatur County, $3,849 per acre. Seventy-eight of Iowa’s  99 counties  reported a rise in land value, while the remaining 21 counties saw a decline. The largest percentage increase, 7.7%, was reported in Wayne County. The largest dollar decrease was reported in Des Moines County, $241 per acre, while Lyon County saw the largest dollar increase, $577 per acre. The highest percentage decrease, 3.4%, was reported in Henry County.

Thirty-eight percent of respondents reported more sales in 2020 relative to 2019. On the other end of the spectrum, just 19% reported fewer sales, and 43% reported the same level of sales in 2020 relative to 2019.

Most farmland sales, 72%, were to existing farmers, of which existing local farmers were 69%. Only 3% of sales were to existing relocating farmers. Investors represented 22% of land sales. New farmers represented 4% of sales, and other purchasers were 2% of sales. Sales to existing local farmers by crop reporting district ranged from 78% in the northwest district to 51% in the south-central district. Sales to investors were highest in the south-central district at 34%. The Northwest and Southeast districts reported the lowest investor activity at 14%.

Annual change in Iowa farmland values by crop districtIowa farmland values percent changes by countyIowa farmland values by county

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