Iowa State University Extension

2000 IOWA LAND VALUE SURVEY: OVERVIEW

Prepared by Michael D. Duffy, agricultural extension economist, and Darnell Smith, research associate, Iowa State University, December 2000.

1.0 History and Purpose of the Land Value Survey.

1.1 The survey was initiated in 1941 and is sponsored annually by the Iowa Agriculture and Home Economics Experiment Station, Iowa State University. Only the state average and the district averages are based directly on the ISU survey data. The county estimates are derived by using a procedure that combines the ISU survey results with data from the U.S. Census of Agriculture. The survey was conducted by Michael Duffy and Darnell Smith.

1.2 The survey is intended to provide information on general land value trends, geographical land price relationships and factors influencing the Iowa land market.

1.3 The survey is based on reports by licensed real estate brokers and selected individuals considered to be knowledgeable of land market conditions. Approximately 1100 surveys are mailed each year. Normally 500-600 completed surveys are returned. The 2000 survey is based on 603 usable responses.

1.4 Participants in the survey are asked to estimate the value of high, medium and low grade land in their county. Comparative sales and other factors are taken into account by the respondents in making these value estimates.

2.0 Analysis by State.

2.1 The 2000 state average for all grades of land was estimated to be $1857 per acre.

2.2 The increase in the state value was $76 per acre from 1999.

2.3 The percentage increase was 4.3 percent from 1999.

3.0 Analysis by Crop Reporting District.

3.1 The highest land values were reported for Northwest Iowa, $2198 per acre.

3.2 The lowest land values were estimated for South Central Iowa, $992 per acre.

3.3 The greatest percentage increase was in Northwest Iowa, 6.8 percent.

3.4 The least percentage increase was in South Central Iowa, 1.1 percent.

4.0 Analysis by Counties.

4.1 The highest value was estimated for Scott county, $3018 per acre.

4.2 The lowest value was in Decatur county, $765 per acre.

4.3 The greatest dollar increase was $150 in O'Brien county.

4.4 The least dollar increase was $13 in Decatur county.

4.5 The greatest percentage increase was 6.5 percent reported in Dickinson, Lyon, O'Brien, and Osceola counties.

4.6 The least percentage increase was in Scott county, 1.6 percent.

5.0 Analysis by Quality of Land.

5.1 Low grade land in the state averaged $1117 per acre and showed a 6.9 percent increase or $72 per acre.

5.2 Medium grade land averaged $1701 per acre and showed a 4.4 percent increase or $72 per acre.

5.3 High grade land averaged $2324 per acre and showed an increase of 3.3 percent or $75 per acre.

6.0 Major Factors Influencing the Real Estate Market.

Survey respondents listed both positive and negative factors influencing the land market. The respondents listed multiple factors in most cases.

6.1 There were 6 positive factors listed by over 10 percent of the respondents.

6.2 Government programs or payments were the most frequently listed positive factor identified by 47 percent of the respondents.

6.3 Other positive factors were: investment demand (23 percent), crop yields (23 percent), land supply (19 percent), farm expansion/consolidation (15 percent), and interest rates (13 percent).

6.4 There were 3 negative factors listed by over 10 percent of the respondents. Poor markets or prices or some variation of that theme were listed by 70 percent of the respondents. The other factors were: interest rates (16 percent) and poor agricultural economy or outlook (10 percent).

7.0 Number of Sales Compared to Previous Year.

When asked to compare the number of sales in 2000 relative to 1999, 21 percent reported more, 51 percent the same, and 28 percent reported less.

8.0 Land Sales by Buyer Category.

The 2000 survey asked respondents what percent of the land sales were sold to four categories of buyers.

8.1 The majority of farmland sales: 65 percent were to existing farmers. Investors represented 29 percent of the sales. New farmers represented 3 percent of the sales and, other purchases were 3 percent of sales.

8.2 Sales to existing farmers by Crop Reporting Districts ranged from 71 percent in Northwest to 51 percent in Southwest.

8.3 Sales to investors were highest in Southwest (43 percent). Southeast reported the lowest investor activity (20 percent).

9.0 Interpretation of Survey Results.

The average 4.2 percent increase in land values is in line with other surveys of Iowa land values. It is important to remember the different time periods covered when comparing surveys. The Iowa State University survey reported here is an annual survey as of November 1, 2000.

9.1 The survey shows the first increase in average land values in three years. The survey showed an increase in values in all counties and Crop Reporting Districts.

9.2 The survey respondents show that in 2000 the level of investor interest in Iowa farmland remained strong. (The survey also showed an increase in those reporting more sales activity relative to 1999).

9.3 The positive and negative factors clearly summarize the current situation with respect to the Iowa farmland market. Low commodity prices are exerting considerable downward pressure on prices but offsetting this are the government payments, the good yields and strong demand for land. All of these factors show the relative instability that the land market could experience over the next few years. The current government program is set to expire in 2002, yields are always variable, and the demand for land is a function of many things including the stock market.

Table 1. Recent Changes in Iowa Farmland Values

 

Year

Value Per Acre

Dollar Change

Percentage Change

1966

354

36

11.4

1967

397

42

12.0

1968

409

12

3.0

1969

419

10

2.5

1970

419

0

0.0

1971

430

11

2.6

1972

482

52

12.0

1973

635

154

31.9

1974

834

199

31.3

1975

1095

261

31.3

1976

1368

273

24.9

1977

1450

82

6.0

1978

1646

196

13.5

1979

1958

312

19.0

1980

2066

108

5.5

1981

2147

82

3.9

1982

1801

-346

-16.1

1983

1691

-110

- 6.1

1984

1357

-334

-19.8

1985

948

-409

-30.2

1986

787

-161

-17.0

1987

875

88

11.2

1988

1054

179

20.4

1989

1139

85

8.1

1990

1214

75

6.6

1991

1219

5

.4

1992

1249

30

2.5

1993

1275

26

2.1

1994

1356

81

6.4

1995

1455

99

7.3

1996

1682

227

15.6

1997

1837

155

9.2

1998

1801

-36

-1.9

1999

1781

-20

-1.1

2000

1857

76

4.3

Table 2. Average Value Per Acre of Iowa Farmland Listed by Crop Reporting Districts and Grades of Land

Year
State Average
North
west
North Central
North
east
West Central
Central
East Central
South
west
South Central
South
east

All Grades

1981

2147

2562

2721

2227

2056

2538

2530

1586

1184

1790

1986

787

937

912

786

768

930

1000

607

403

705

1987

875

1084

1055

835

871

1044

1053

676

421

782

1992

1249

1603

1449

1162

1324

1508

1395

905

646

1138

1993

1275

1618

1507

1176

1326

1542

1433

961

643

1166

1994

1356

1663

1610

1249

1453

1653

1546

1009

673

1241

1995

1455

1755

1724

1330

1528

1766

1676

1102

742

1367

1996

1682

2071

1997

1559

1758

2090

1965

1206

851

1502

1997

1837

2263

2194

1721

1894

2295

2110

1369

957

1580

1998

1801

2174

2119

1757

1820

2192

2123

1373

948

1585

1999

1781

2059

2073

1807

1837

2128

2118

1346

981

1570

2000

1857

2198

2169

1868

1924

2195

2190

1412

992

1655

High Grade

1981

2759

3035

3209

2885

2576

3061

3293

2050

1880

2726

1986

1048

1131

1094

1048

1000

1154

1343

832

682

1120

1987

1150

1306

1260

1102

1125

1288

1399

912

688

1229

1992

1628

1920

1696

1557

1702

1846

1800

1212

1039

1764

1993

1666

1941

1764

1558

1707

1914

1851

1284

1041

1834

1994

1760

1972

1871

1651

1859

2010

1995

1347

1092

1938

1995

1869

2058

1968

1729

1939

2159

2131

1483

1163

2091

1996

2151

2431

2300

2015

2210

2558

2518

1586

1316

2291

1997

2328

2647

2531

2210

2350

2790

2673

1786

1443

2383

1998

2284

2534

2449

2238

2268

2659

2683

1798

1455

2369

1999

2249

2401

2362

2275

2288

2589

2685

1773

1499

2271

2000

2324

2547

2462

2329

2375

2660

2743

1825

1509

2353

Medium Grade

1981

1931

2252

2334

2052

1866

2279

2258

1472

1149

1604

1986

699

830

777

709

684

813

866

561

396

622

1987

780

957

903

754

776

928

925

630

413

696

1992

1113

1420

1275

1038

1175

1346

1238

835

622

975

1993

1135

1434

1317

1054

1174

1363

1268

888

618

1015

1994

1223

1511

1420

1127

1316

1478

1387

936

652

1085

1995

1322

1598

1558

1216

1394

1580

1510

1009

726

1210

1996

1514

1873

1769

1423

1585

1843

1752

1111

829

1321

1997

1668

2033

1945

1577

1742

2050

1910

1280

945

1404

1998

1638

1970

1885

1604

1670

1968

1930

1274

924

1414

1999

1629

1876

1869

1665

1692

1898

1945

1241

949

1433

2000

1701

2001

1972

1728

1772

1956

1996

1320

955

1511

Low Grade

1981

1157

1460

1517

1220

1125

1336

1366

959

624

752

1986

377

488

468

405

350

475

460

290

176

257

1987

432

571

553

444

419

535

495

341

207

289

1992

648

866

813

592

668

784

712

511

346

486

1993

656

856

834

626

669

781

742

531

342

478

1994

714

882

935

668

752

914

808

555

348

503

1995

792

992

1049

737

812

967

925

614

400

574

1996

936

1213

1207

878

981

1146

1073

688

479

674

1997

1042

1354

1337

992

1083

1279

1186

787

544

730

1998

1030

1299

1286

1059

1021

1258

1205

792

542

739

1999

1045

1216

1314

1110

1040

1296

1188

798

582

790

2000

1117

1370

1387

1167

1126

1299

1288

862

597

875

Level of Sales Activity, 2000

Crop Reporting District

More
Same
Less
Percent

Northwest

20
53
27

North Central

28
38
34

Northeast

14
60
26

West Central

25
53
21

Central

15
51
34

East Central

28
54
18

Southwest

16
44
40

South Central

14
54
32

Southeast

28
49
23

State

21
51
28

Iowa Land Purchases, 2000

Crop Reporting District

Existing Farmers
Investors
New Farmers
Other

Percent

Northwest

71

27

1

1

North Central

70

26

3

1

Northeast

67

25

4

4

West Central

67

29

2

1

Central

65

30

2

4

East Central

65

28

3

4

Southwest

51

43

3

3

South Central

49

41

4

6

Southeast

65

20

4

11

State

65

29

3

3

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