Federal report shows farmland values take big jump, with the biggest jump in the Corn Belt
August 10th, 2013 by Ric Hanson
After Iowa farmland values hit a record high late in 2012, a new report from the U-S Department of Agriculture shows farmland values nationwide took another big jump this year. The U-S-D-A’s chief economist Joe Glauber says there was an especially big jump in cropland prices on the agency’s new report versus last year. “Farm real estate value this year was estimated to be $2900 an acre as compared to $2650 an acre, that’s up 9.4%,” Glauber says. “If you look at just cropland, the average per acre is $4000, up from $3540, that’s up 13%.” Iowa’s average farmland values last year were more than double that figure. Glauber says the highest prices for farmland in the latest report are in the Corn Belt where the average acre is worth 64-hundred dollars, also up 13-percent. He says there is a ceiling, somewhere.
“Certainly, the idea that we’ll continue to see 10% increases per year, I think, is unlikely,” Glauber says. Farmland values have risen 50-percent in the last four years and Glauber says the reasons include low interest rates and good, strong income prospects. As for 2014, Glauber says the values may not go up quite as rapidly. ”People are looking for income levels to moderate a bit after the strong growth we’ve seen and the fact that we may see slightly higher interest rates,” he says. “Both of those would have negative effects at least on the growth rates of land values. I’m not saying that land values necessarily would decline, but the 10% growth that we’ve seen, certainly that’s unlikely to continue.” The annual survey released by Iowa State University last December showed a record average cost of Iowa farmland at $8,296 an acre. The I-S-U survey showed farmland values increased almost 24-percent over the previous year.