The value of an average acre of Iowa farmland eased 0.8% on an annual basis, according to an annual survey conducted by Iowa State University. The survey, conducted by Dr. Wendong Zhang, lists the value of an average acre of Iowa farmland at $7,264 as of November 1, down $62 from a year earlier. The survey also found that the average value of an acre of high-quality and medium-quality land declined 0.8% and 0.7%, respectively, while the value of low-quality farmland decreased 1.7%.
Zhang says Iowa farmland values have marked annual declines in four of the past five years.
He lists low commodity prices and rising interest rates as negative factors in the land market. However, he notes "limited land supply is still a key factor holding up land values."
The survey found eight of the nine crop districts marked either modest gains or declines. However, the south central district registered a 4.6% increase. Zhang suggests the strong gain may be due to demand from non-farm operators for land for recreational use and extremely strong corn and soybean yields noted in that district. He notes that corn and soybean yields are 11% to 12% higher versus a year earlier and are 20% to 27% higher than the 10-year average.