With More Eye-Popping Sales, The Surprising Strength in Iowa Farmland Values

In a year marked by plunging grain prices and rising financial pressure, you might have expected Iowa’s farmland market to finally crack. But a closer look at recent sales data shows a market that remains remarkably resilient — and, in some cases, still setting records.

Jim Rothermich, vice president at Iowa Appraisal, shares his perspective on the surprising stability of Iowa land values, what’s driving demand and where some stress fractures may be starting to show.

2024 in Review: Rising, But Slowing

Even though commodity prices have been cut in half in just a few years, the farmland market has proven to show extreme resilience. According to USDA’s “Land Values 2024 Summary,” the average U.S. farm real estate value (which includes land and buildings) rose to $4,170 per acre, up 5% over 2023. Cropland values averaged $5,570 per acre, a 4.7% increase from the prior year.

These increases in values continued a multi-year stretch of rising land values, even though the pace of growth has clearly moderated. Still, considering the sharp drop in commodity prices, it would make sense for land values to also see pressure. But when you look at it as a whole — especially quality cropland — values are holding strong.

Tight Supply Keeps the Market Firm

One key factor is supporting land values: there simply isn’t much land for sale.

“As you can see, the number of acres going to auction has been trending lower the past four years — same for listings,” Rothermich says. “Most of the volume is from estate sales. There may be a couple of auctions from financial stress but not enough to influence volume. Lack of volume is supportive to market conditions.With fewer tracts hitting the market, buyers have fewer opportunities — keeping competition intense and prices supported.”

Farmers Still in the Driver’s Seat

Despite investors showing up at auctions, local farmers continue to dominate bidding wars. Just this month, a piece of farmland in Black Hawk County sold for $20,238 per acre.

That’s in addition to the notable sales last month. Rothermich says September saw several eye-popping sales across the state, including:

• Mitchell County (north central Iowa): 80 acres sold for $24,400/acre — a new county record — after two local farmers battled for the tract.
• Dallas County: 140 acres went for $20,100/acre.
• Cedar County: 160 acres sold at $19,000/acre.
• Osceola County: 70 acres fetched $18,400/acre.
• Cherokee County: 160 acres brought $17,000/acre, purchased by a local farmer.

“Investors are still attending auctions but are being out competed by locals,” Rothermich explains. “No sales are not an issue currently. Where I do see price drop off is for low quality land. Investors don’t want low quality. If locals are the only bidders, they are discounting farms with issues.”

Rothermich himself recently bought two “wet” farms, planning to enroll them in CRP for a 4% cash return — a sign strategic buying opportunities exist even in a tight market.

Rents Steady, But Financial Stress Emerging

Cash rents, according to Rothermich’s data, have held steady from last year. But beneath the surface, financial pressure is building.

“Financial issues are surfacing. I have had an uptick for appraisals with high-risk lenders on sizable operations. I have not had to do those appraisals since pre-COVID,” he notes.

He’s also hearing more chatter about sale-leasebacks, where financially stressed farmers sell land to investors but lease it back to keep operating — a trend not seen since before the pandemic. Still, a unique factor continues to underpin stability: 84% of Iowa farmland has no debt.

“It is under-capitalized,” Rothermich says. “Most people think Iowa will have a good crop despite a lot of disease pressure. [There are] still strong balance sheets in rural Iowa. The farmers who rent most of their land are really being affected by current economics. Working capital is shrinking.”

Echoes of the 1980s — But Not a Repeat

Some have drawn comparisons to the 1980s farm crisis. In the September Ag Economists’ Monthly Monitor, 91% of ag economists said the row crop side of agriculture is currently in a recession. Of the economists who said ag currently isn’t in a recession, the major reason was simple: strong land values.

“The U.S. crop sector is losing working capital, but cropland values are showing little weakness, either in terms of rents paid or cropland prices. Until the latter two start to weaken, the sector is not in a recession,” said one economist in the anonymous survey.

While Rothermich acknowledges signs of stress, he says the market backdrop is fundamentally different.

“My auction data suggests Iowa land market conditions are down around 8% from the peak in 2022. Grain prices are down almost 50%. [It’s] remarkable the market has not been affected anymore than that,” he says.

Unlike the 1980s, widespread over-leveraging isn’t a problem.

“So far, I am not seeing anything like the ‘80s was and have no concern due to the equity positions that have been built since then,” he says.

The one trend that does give him pause? Retirement auctions.

“It seems a lot of people are exiting the business — much like happened in the 1980s,” he observes.

The Bottom Line

Despite economic headwinds, Iowa’s land market has shown remarkable resilience. Tight supply, strong farmer demand and minimal debt are keeping prices elevated — even as grain markets falter.

But the rise in retirement sales and early signs of financial stress suggest the landscape could shift in the months ahead. For now, though, the surprise story in Iowa land is not decline — but durable strength.