Extension News

Average Value of Iowa Farmland Nears $4,500 an Acre in 2008 Survey

2008 Land Value Trend

Note to media editors: Data from the 2008 survey and a link to an archive of a news conference held Dec. 16 are available online at www.extension.iastate.edu/landvalue/.

12/16/2008

AMES, Iowa -- The average value of an acre of farmland in Iowa reached $4,468 in 2008, continuing to increase for the ninth year in a row, according to an annual survey conducted by Iowa State University Extension. Mike Duffy, ISU Extension farm economist who conducts the survey, said the indicators toward the end of the year imply the upward trend may be slowing as the national economy battles recessionary pressures.

 

The 2008 average was an increase of $560 over last year, the second-highest dollar increase ever recorded in the 67 years that ISU has conducted the survey. The 2007 survey reported a $704 increase over the previous year. The 2008 figure was an increase of 14 percent over 2007, compared with a 22 percent increase last year. Over the past 40 years, the survey has found annual changes ranging from an increase in value of 31.9 percent in 1973 to a loss of 30.2 percent in 1985.

 

Duffy said the timing of the ISU survey is especially important this year because of the trends in the national economy this fall.  The survey is conducted in November each year and the current numbers are based on estimated values as of Nov. 1, 2008, compared to one year earlier. “There have been considerable changes in the situation in Iowa over the past few months.

 

"Monthly average corn and soybean prices in Iowa had been continually rising until July 2008. Corn averaged $5.41 per bushel in July and current prices are below $3.00. Soybeans averaged $13.10 in July and the current prices are below $8.00 per bushel. This change in revenue has been accompanied by substantial increases in the costs of production, especially for fertilizers and seed,” Duffy noted.

 

He said the lower grain prices in recent months and the higher costs of production mean lower net revenue per acre, which is an indicator that land values will be moderating. Other surveys conducted earlier in the year indicated higher increases, including a 17.6 percent increase for two six-month periods ending in September, reported by the Realtors Land Institute, and a 17 percent increase for the year ending in October, reported by the Seventh District Federal Reserve Board.  

 

Despite the indicators that rapid increases may be coming to an end, Duffy said the ISU survey did show considerable strength in Iowa farmland. Land values have almost doubled since 2003, going from $2,275 to $4,468 in just five years. In 2008, three counties averaged more than $6,000 per acre. This is the first time any county has averaged over that amount. Similarly, 2008 marked the first time that no county has averaged below $2,000 per acre.

 

There also were some notable changes in other categories from the 2008 survey. East Central Iowa reported a significant decrease in the amount of sales activity. Almost half, 44 percent, of the respondents from the East Central crop reporting district reported less sales relative to the same time period from a year ago. Duffy said this is a reflection of the flooding and other hardships suffered in this area over the past year. South Central Iowa also reported a significant decline in sales, with 43 percent reporting less sales, perhaps reflecting the relatively soft demand for recreational land. 

 

Of the nine crop reporting districts in the state, Northwest Iowa reported the highest average value at $5,395 per acre. The lowest average in the state was in South Central Iowa at $2,573 per acre. West Central Iowa was the leader in percentage increase at 19.6 percent, while South Central Iowa had the lowest percentage increase at 10.7 percent.

 

The highest county average in the state was Scott County at $6,310 per acre, while Decatur County was lowest at $2,002 per acre. Sioux County led the state with the largest dollar increase at $891 per acre, while Monona County had the largest percentage increase at 19.9 percent.

 

Low grade land in the state averaged $2,967 per acre, an increase of $311 or 11.7 percent over the 2007 survey. Medium grade land averaged $4,195 per acre, a $528 increase or 14.4 percent. High grade land averaged $5,381 per acre, an increase of $695 or 14.8 percent.

 

Summarizing the results of the survey, Duffy said he views 2008 as “a return to more normal conditions in the land market where the unbridled exuberance we witnessed the past 24 months has been curtailed. I think the land values will retreat some from the highs, but not go into the free-fall we witnessed in the 1980s. Where land values will go in the next year or so is really anyone’s guess, but, overall, Iowa farmland should remain a good investment for the long run.”

 

Data on farmland sales have 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. This year, 479 usable surveys were returned, providing 625 individual county estimates, including land values in nearby counties if they had knowledge of values in those counties.

 

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The following chart indicates 2008 values by crop reporting district and county, 2007 values, dollar change from 2007 to 2008 and percentage change from 2007 to 2008.

Crop District             2008             2007        $ change       % change
Northwest                  5,395             4,699           696                  14.8%
North Central             4,950             4,356           594                  13.6%
Northeast                   4,590             4,055           535                  13.2%
West Central             4,823             4,033           790                   19.6%
Central                       5,280             4,529           751                   16.6%
East Central              4,743             4,272           471                   11.0%
Southwest                 3,626             3,209           416                   13.0%
South Central            2,573            2,325            248                   10.7%
Southeast                  3,913            3,463            449                   13.0%
    
State Average           4,468            3,908           560                   14.3%


County                         2008              2007         $ change    % change
Adair                            3,081              2,742              339              12.4%
Adams                        3,094              2,688              406              15.1%
Allamakee                  2,931              2,640              291              11.0%
Appanoose                2,089              1,908              181                 9.5%
Audubon                     4,720              3,991              729              18.3%
Benton                        5,192              4,485              707              15.8%
Black Hawk               5,818              5,083              735              14.5%
Boone                         5,497              4,680              817              17.4%
Bremer                       5,180              4,603              577              12.5%
Buchanan                  5,096              4,518              578              12.8%
Buena Vista               5,582              4,846              736              15.2%
Butler                          5,016              4,398              618              14.1%
Calhoun                     5,691              4,878              813              16.7%
Carroll                         5,179              4,434              745              16.8%
Cass                           4,174              3,598              576              16.0%
Cedar                          4,934              4,429              505              11.4%
Cerro Gordo               5,029              4,439              590              13.3%
Cherokee                    5,234              4,466              768              17.2%
Chickasaw                 4,236              3,767              469              12.5%
Clarke                          2,444              2,213              231              10.4%
Clay                              5,189              4,506              684              15.2%
Clayton                        4,008              3,610              398             11.0%
Clinton                         4,208              3,798              410              10.8%
Crawford                     4,750              4,013              737              18.4%
Dallas                          5,077              4,327              750              17.3%
Davis                           2,675              2,406              269              11.2%
Decatur                       2,002              1,828              173                 9.5%
Delaware                    5,152              4,628              524              11.3%
Des Moines               4,380              3,899              481              12.3%
Dickinson                   4,879              4,210              669              15.9%
Dubuque                     4,705              4,239              466              11.0%
Emmet                        5,199              4,515              684              15.2%
Fayette                        4,633              4,144              489              11.8%
Floyd                           4,893              4,325              568              13.1%
Franklin                      4,934              4,329              605              14.0%
Fremont                      3,954              3,478              476              13.7%
Greene                        4,973              4,235              738              17.4%
Grundy                        5,787              4,985              802              16.1%
Guthrie                        4,362              3,675              687              18.7%
Hamilton                     5,735              4,934              801              16.2%
Hancock                     4,971              4,381              590              13.5%
Hardin                         5,210              4,482              728              16.2%
Harrison                     4,437              3,773              664              17.6%
Henry                          4,121              3,668              453              12.3%
Howard                       3,823              3,400              423              12.4%
Humboldt                   5,390              4,689              701              15.0%
Ida                               5,244              4,426              818              18.5%
Iowa                            4,356              3,785              571              15.1%
Jackson                     3,882              3,501              382              10.9%
Jasper                        4,487              3,929              558              14.2%
Jefferson                    3,159              2,811              348              12.4%
Johnson                     5,155              4,579              577              12.6%
Jones                         4,121              3,719              402              10.8%
Keokuk                       3,703              3,262              440              13.5%
Kossuth                     5,164              4,537              627              13.8%
Lee                             3,998              3,602              395              11.0%
Linn                            5,196              4,638              557              12.0%
Louisa                       4,498              3,997              501              12.5%
Lucas                         2,297              2,098              199                 9.5%
Lyon                           5,167              4,458              709              15.9%
Madison                    3,763              3,316              447              13.5%
Mahaska                   3,987              3,547              440              12.4%
Marion                       3,943              3,555              388              10.9%
Marshall                    4,768              4,103              665              16.2%
Mills                           4,351              3,827              524              13.7%
Mitchell                     4,791              4,235              556              13.1%
Monona                    4,140              3,452              688              19.9%
Monroe                     2,732              2,454              278              11.3%
Montgomery            3,600              3,167              433              13.7%
Muscatine                4,671              4,183              488              11.7%
O'Brien                     6,149              5,306              843              15.9%
Osceola                   5,432              4,687              745              15.9%
Page                         3,209              2,823              386              13.7%
Palo Alto                  5,025              4,392              633              14.4%
Plymouth                 5,691              4,802              890              18.5%
Pocahontas            5,350              4,663              688              14.7%
Polk                          4,902              4,234              668              15.8%
Pottawattamie        4,707              4,072              635              15.6%
Poweshiek              4,340              3,776              564              14.9%
Ringgold                  2,361              2,126              235              11.0%
Sac                           5,542              4,745              797              16.8%
Scott                         6,310              5,699              610              10.7%
Shelby                      4,783              4,057              725              17.9%
Sioux                        6,095              5,204              891              17.1%
Story                         5,686              4,852              834              17.2%
Tama                       4,786              4,123              663              16.1%
Taylor                       2,733              2,435              298              12.2%
Union                       2,909              2,622              287              11.0%
Van Buren              2,936              2,642              293              11.1%
Wapello                  3,058              2,719              339              12.5%
Warren                    4,011              3,588              423              11.8%
Washington           4,867              4,289              579              13.5%
Wayne                     2,132              1,947              185                 9.5%
Webster                  5,555              4,779              776              16.2%
Winnebago            4,600              4,054              546              13.5%
Winneshiek            3,814              3,413              401              11.8%
Woodbury               4,270              3,570              700              19.6%
Worth                       4,715              4,162              553              13.3%
Wright                      5,526              4,807              719              15.0%

 

Contacts :

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

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