Extension News

Average Value of Iowa Farmland Tops $3,900 an Acre in 2007 Survey

12/18/2007

AMES, Iowa -- The average value of an acre of farmland in Iowa increased by just over $700 during the past year, to an all-time high of $3,908, according to an annual survey conducted by Iowa State University (ISU) Extension. The land boom is being driven by the developing biofuel economy, according to Mike Duffy, ISU Extension farm economist who conducts the survey.

Duffy said the 22 percent increase recorded this year is the greatest one-year increase since 1976, and marks a new record for the fifth year in a row. Since the year 2000, Iowa land values have increased an average of $2,051 per acre, more than a 100 percent increase over the 2000 average value of $1,857.

The increases in values were reported statewide, with the survey recording averages above $5,000 an acre in four counties, and between $4,000 and $5,000 an acre in 51 counties. Nineteen counties reported increases of more than 25 percent, and 59 counties had increases between 20 and 25 percent.

Duffy noted that some of the smaller percentage increases occurred in the counties and crop reporting districts along Iowa’s eastern and western borders. He said this reflects the impact of local demand for corn from ethanol plants. Counties along the border rivers previously received the best prices for crops due to low transportation costs to gulf port markets, but now those crops are being used locally by the ethanol plants, which is driving up prices in interior counties.

Duffy said he frequently is asked whether the land market will crash, and how high it might go before it tops out. He also is questioned about the impact of the weakening dollar, the new farm bill, and the current subprime mortgage crisis. “My general feeling is that the land market will remain strong for at least the next five years,” he responds. “We have seen a fundamental shift in demand for corn due to ethanol production. I don’t think this demand will diminish in the near future,” he said.

“The world of agriculture as we know it here in Iowa has changed,” Duffy said. “Where the changes will settle out and when is not known.”

Of the nine crop reporting districts in the state, northwest Iowa reported the highest average value at $4,699 per acre. The lowest average in the state was in south central Iowa at $2,325 per acre. Northeast Iowa was the leader in percentage increase at 27.2 percent, while east central Iowa had the lowest percentage increase at 14.7 percent.

The highest county average in the state was Scott County at $5,699 per acre, while Decatur County was lowest at $1,828 per acre. Sioux County led the state with the largest dollar increase at $1,142 per acre, while Floyd County had the largest percentage increase at 30.3 percent.

Low grade land in the state averaged $2,655 per acre, an increase of $460 or 21 percent over the 2006 survey. Medium grade land averaged $3,666 per acre, a $655 increase or 21.8 percent.  High grade land averaged $4,686 per acre, an increase of $851 or 22.2 percent.

Survey participants were asked to indicate positive and negative factors that affected land prices during 2007. Good grain prices was by far the most frequently mentioned positive factor, listed by 35 percent of the respondents. Another 10 percent mentioned low interest rates as a major factor.

Three negative factors impacting land values were listed by more than 10 percent of the respondents. They included high costs for the inputs needed to grow crops, listed by 25 percent; high land prices in general, listed by 12 percent; and a concern over how long the market would remain at high levels, listed by 11 percent.

Thirty-seven percent of the respondents to this year’s survey reported more land sales in 2007 than in the previous year. That was the highest percentage since 1988. Buyers were existing farmers in 60 percent of the sales, and investors in 34 percent of the sales, essentially unchanged from the previous year, but down considerably from a decade ago when existing farmers represented nearly 75 percent of the buyers.

Data on farmland sales has been collected by Iowa State University annually since 1941. About 1,100 copies of the survey are mailed each year to licensed real estate brokers, ag lenders, and others knowledgeable of Iowa land values. Respondents are asked to report values as of Nov. 1. Average response is 500 to 600 completed surveys, with 499 usable surveys returned this year. Respondents provided 668 individual county estimates, including land values in nearby counties if they had knowledge of values in those counties.

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Additional detail on the 2007 survey is available on the ISU Extension web site at www.extension.iastate.edu/landvalue/

The following chart indicates 2007 values by crop reporting district and county, 2006 values, dollar change from 2006 to 2007, and percentage change from 2006 to 2007.

                            2007    2006 $ change % change

Northwest        4,699   3,783   916   24.2%

North Central  4,356   3,478   879   25.3%

Northeast        4,055   3,187   868   27.2%

West Central  4,033   3,410   623   18.3%

Central            4,529   3,716   812   21.9%

East Central   4,272   3,725   547   14.7%

Southwest      3,209   2,580   629   24.4%

South Central 2,325   1,927   399   20.7%

Southeast       3,463   2,849   614   21.6%

State Average 3,908   3,204   704   22.0%

 

 

                      2007    2006 $ change % change

Adair             2,742   2,198     544   24.7%
Adams         2,688   2,203     485   22.0%
Allamakee   2,640   2,126     514   24.2%
Appanoose 1,908   1,564     344   22.0%

Audubon     3,991   3,311     680   20.5%

Benton         4,485   3,619     866   23.9%

Black Hawk 5,083   3,952 1,131   28.6%

Boone         4,680   3,917     763   19.5%

Bremer        4,603   3,621     983   27.1%

Buchanan   4,518   3,562     956   26.8%

Buena Vista 4,846   3,914    932   23.8%

Butler           4,398   3,458     940   27.2%

Calhoun      4,878   3,958     920   23.2%

Carroll          4,434   3,581    854   23.8%

Cass            3,598   2,950    648   22.0%

Cedar           4,429   4,012    417   10.4%

Cerro Gordo 4,439   3,567   872   24.5%

Cherokee    4,466   3,581     885   24.7%

Chickasaw  3,767   2,909     858   29.5%

Clarke          2,213   1,811     402   22.2%

Clay              4,506   3,612     894   24.7%

Clayton        3,610   2,919     691   23.7%

Clinton         3,798   3,285     513   15.6%

Crawford     4,013   3,254     759   23.3%

Dallas          4,327   3,385     942   27.8%

Davis            2,406   1,956     450   23.0%

Decatur        1,828   1,465     364   24.8%

Delaware     4,628   3,866     762   19.7%

Des Moines 3,899   3,179    720   22.7%

Dickinson    4,210   3,404     805   23.7%

Dubuque     4,239   3,513     726   20.7%

Emmet         4,515   3,721     794   21.3%

Fayette         4,144   3,337     807   24.2%

Floyd             4,325   3,320 1,005   30.3%

Franklin        4,329   3,518    811   23.1%

Fremont       3,478   2,832    646   22.8%

Greene        4,235   3,470    765   22.0%

Grundy        4,985   3,996     988   24.7%

Guthrie        3,675   2,963     711   24.0%

Hamilton     4,934   4,097     836   20.4%

Hancock      4,381   3,592     789   22.0%

Hardin         4,482   3,667     816   22.2%

Harrison      3,773   3,093     680   22.0%

Henry           3,668   3,073      596   19.4%

Howard        3,400   2,621     780   29.7%

Humboldt    4,689   3,873      816   21.1%

Ida                4,426   3,668      757   20.6%

Iowa             3,785   3,131      654   20.9%

Jackson       3,501   2,931     569   19.4%

Jasper         3,929   3,301      629   19.1%

Jefferson     2,811   2,375      436   18.3%

Johnson      4,579   3,911      668   17.1%

Jones           3,719   3,147      572   18.2%

Keokuk        3,262   2,836      427   15.0%

Kossuth       4,537   3,707     830   22.4%

Lee               3,602   2,893      709   24.5%

Linn              4,638   3,983      656   16.5%

Louisa          3,997   3,413      584   17.1%

Lucas            2,098   1,672      426   25.5%

Lyon               4,458   3,447   1,011   29.3%

Madison         3,316   2,644     672   25.4%

Mahaska        3,547   2,963     584   19.7%

Marion            3,555   2,925     629   21.5%

Marshall        4,103   3,433     670   19.5%

Mills                3,827   3,095     732   23.6%

Mitchell           4,235   3,252     983   30.2%

Monona           3,452   2,838     613   21.6%

Monroe            2,454   1,981     473   23.9%

Montgomery    3,167   2,630     536   20.4%

Muscatine       4,183   3,647      536   14.7%

O'Brien             5,306   4,255  1,051   24.7%

Osceola           4,687   3,640  1,046   28.7%

Page                 2,823   2,372     451   19.0%

Palo Alto           4,392   3,525     867   24.6%

Plymouth          4,802   3,830     972   25.4%

Pocahontas     4,663   3,830      832   21.7%

Polk                   4,234   3,487      747   21.4%

Pottawattamie 4,072   3,294      778   23.6%

Poweshiek       3,776   3,124      651   20.8%

Ringgold          2,126   1,726      400   23.2%

Sac                    4,745   3,824      921   24.1%

Scott                  5,699   5,073      626   12.3%

Shelby               4,057   3,287      770   23.4%

Sioux                  5,204   4,063  1,142   28.1%

Story                   4,852   4,021     831   20.7%

Tama                 4,123   3,320     802   24.2%

Taylor                 2,435   1,948     487   25.0%

Union                 2,622   2,085     537   25.8%

Van Buren         2,642   2,159     484   22.4%

Wapello            2,719   2,237     482   21.5%

Warren              3,588   2,935     653   22.2%

Washington     4,289   3,624     665   18.4%

Wayne               1,947   1,596    351   22.0%

Webster            4,779   4,040    739   18.3%

Winnebago      4,054   3,238    816   25.2%

Winneshiek      3,413   2,720   693   25.5%

Woodbury         3,570   3,014    557   18.5%

Worth                4,162   3,268    895   27.4%

Wright               4,807   3,988    819   20.5%

 

Contacts :

Michael Duffy, Economics, (515) 294-6160, mduffy@iastate.edu

Del Marks , Extension Communications and Marketing, (515) 294-9807, delmarks@iastate.edu