Capital Clicks

New record: Iowa farmland values jump 29 percent

By: - December 15, 2021 12:26 pm

The dollar value of Iowa’s agricultural land reached a record high this year, but inflation-adjusted value trails 2012 and 2013. (Courtesy of Iowa State University)

Farmland prices in Iowa reached a new high this year of about $9,750 per acre, according to Iowa State University’s annual Farmland Value Survey.

Higher commodity prices, favorable interest rates and strong yields were the primary driving forces behind an uptick in land sales, the survey revealed.

The Iowa State University Land Value Survey has tracked average farmland prices since the 1940s. (Courtesy of Iowa State University)

However, the state’s agricultural land in 2013 was more valuable when adjusted for inflation. That year, the survey said an acre was worth about $8,700. That is the equivalent of about $10,400 in today’s dollars, according to the U.S. Bureau of Labor Statistics’ inflation calculator.

“The inflation-adjusted values are still less than the values for 2012 and 2013,” said Wendong Zhang, an associate professor of economics at Iowa State. “However, this is very, very significant. … The last time we have seen the land value changes increase close to or higher than 30% was in 2011.”

In absolute dollar figures, the average price for the state’s farmland is up 29% from 2020, when an acre was valued at about $7,560.

The latest figures were derived from the survey responses of 455 agricultural professionals throughout the state. Researchers combined that information with U.S. Census of Agriculture data to determine county land values.

Those land values are highest in far northwest Iowa and lowest in far southern Iowa.

About two-thirds of this year’s land sales were to existing local farmers, the survey found. Investors represented about a quarter of the buyers, and new farmers accounted for about 4%.

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register. His investigative work exposing police misconduct has notched several state and national awards. He is a longtime trustee of the Iowa Freedom of Information Council, which fights for open records and open government. He is a lifelong Iowan and has lived mostly in rural western parts of the state.