Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915
12/15/98
Contacts: Michael D. Duffy, Extension
Economics, (515) 294-3000
Del Marks, Extension Communication Systems, (515)
294-9807
Value of Iowa Farmland Drops 1.9 Percent, First Decline since 1986
AMES, Iowa -- The average value of an acre of farmland in Iowa dropped to $1,801 in 1998, the first decline in value since 1986, according to an annual survey conducted at Iowa State University.
The decrease averaged $39 an acre, or 1.9 percent statewide, said Michael Duffy, ISU Extension economist who directed the survey. He said land values in Iowa continued their 11-year upward trend during the early months of 1998, but started to decline late in the year, reflecting lower prices that farmers are receiving for all major commodities. The ISU survey is conducted on Nov. 1 each year and is the only survey that reports land values in all 99 Iowa counties.
While the statewide average value declined, 30 counties actually showed increases in 1998, and one county, Decatur in south central Iowa, was unchanged from 1997. In the 68 counties where values declined, the largest percentage drop was in Boone County in central Iowa where the decline was 4.7 percent. Farmland in 21 counties lost more than 4 percent of its value, mostly in the northwest quadrant of the state where some of the most valuable land is located.
The counties where values increased were located in the northeast corner of the state where dairy farmers have been harmed less by low commodity prices than other farmers, and in the southeast corner of the state. The greatest increases were in Allamakee and Clayton Counties, in the extreme northeast corner, where values rose 2.3 percent. Declines of less than 2 percent were reported in east central Iowa and in southwest Iowa counties.
Duffy said three factors were mentioned by more than 10 percent of the respondents as having positive impacts on land values this year. They were lower interest rates, mentioned by 49 percent, crop yields (18 percent), and the supply of land available (14 percent). Four factors, all related to low commodities prices, were mentioned as negative influences. They were low grain prices, mentioned by 49 percent, low livestock prices (29 percent), low commodities prices (27 percent), and low hog prices (10 percent).
The statewide average in 1998 tied 1982 for fifth place in the ranking of average values. The statewide average in 1982 also was $1,801, a drop of 16 percent from the all-time high average of $2,147 in 1981. The only other years with averages higher than this year were 1979, 1980 and 1997.
Duffy said some concern has been expressed about whether the 1998 drop is the beginning of a collapse in the land market similar to the 1980s when values dropped more than 60 percent from the peak before beginning to climb again. He noted that the 1998 average is 16 percent below the 1981 peak but 129 percent above the 1986 bottom.
The duration of the current decline in values likely depends on how long low prices for commodities last, Duffy said. "The expectations for returns will continue to be the major force in determining the direction of the land market," he added. Other factors include the impact of interest rates, and the influences of other economic indicators such as the stock market.
Most buyers of Iowa farmland continue to be existing farmers who are increasing their holdings, Duffy said, but investors made 30 percent of the purchases this year, up from 22 percent last year. Sales to investors were highest in southwest Iowa at 52 percent, while sales to existing farmers were highest in west central Iowa at 75 percent. Seventeen percent of the survey respondents said there were more sales this year, 50 percent said the number of sales was about the same as last year, and 33 percent said there were fewer sales.
The highest land values by crop reporting district were reported in central Iowa where the average was $2,192 per acre. The lowest average value was $948 per acre in south central Iowa. While the central Iowa district had the highest average value, it also had the largest percentage of decrease at 4.5 percent. The greatest percentage of increase was 2.1 percent in northeast Iowa.
The highest estimated value was $2,859 per acre in Scott County in east central Iowa, and the lowest was $757 per acre in Decatur County. Low grade land in the state averaged $1,030 per acre and showed a decrease of 1.1 percent or $12 per acre. Medium grade land averaged $1,638 per acre and decreased $30 or 1.8 percent. High grade land averaged $2,248 per acre and decreased $44 or 1.9 percent.
Iowa State University has conducted an annual survey of land values since 1941. More than 1,100 licensed real estate brokers and others knowledgeable about farmland are invited to participate, and this year's survey drew 589 usable responses from all 99 counties. Only the statewide data and the crop reporting district data is directly from the survey results. Data collected in the survey is combined with data from the U.S. Census of Agriculture to determine county figures. The survey is cosponsored by the Iowa Agriculture and Home Economics Experiment Station and Iowa State University Extension.
ml: state, isufarm
By Crop Reporting District:
1998 1997 1997-98
District $/acre $/acre $ Change % Change
Northwest 2,174 2,263 -89 -3.9%
North Central 2,119 2,194 -75 -3.4%
Northeast 1,757 1,721 36 2.1%
West Central 1,820 1,894 -74 -3.9%
Central 2,192 2,295 -103 -4.5%
East Central 2,123 2,110 13 0.6%
Southwest 1,373 1,369 4 0.3%
South Central 948 957 -9 -0.9%
Southeast 1,585 1,580 4 0.3%
State Avg. 1,801 1,837 -36 -2.0%
By County:
1998 1997 1997-1998
County Name $/acre $/acre $ Change % Change
Adair 1,166 1,179 -13 -1.1%
Adams 1,171 1,190 -19 -1.6%
Allamakee 1,121 1,096 25 2.3%
Appanoose 798 799 -1 -0.1%
Audubon 1,737 1,784 -47 -2.6%
Benton 2,116 2,188 -72 -3.3%
Black Hawk 2,296 2,314 -18 -0.8%
Boone 2,338 2,453 -115 -4.7%
Bremer 2,029 1,997 32 1.6%
Buchanan 2,034 2,015 19 0.9%
Buena Vista 2,275 2,380 -105 -4.4%
Butler 2,095 2,117 -22 -1.0%
Calhoun 2,345 2,458 -113 -4.6%
Carroll 2,036 2,125 -89 -4.2%
Cass 1,530 1,558 -28 -1.8%
Cedar 2,312 2,340 -28 -1.2%
Cerro Gordo 2,169 2,185 -16 -0.7%
Cherokee 1,948 2,026 -78 -3.8%
Chickasaw 1,653 1,627 26 1.6%
Clarke 927 930 -3 -0.3%
Clay 2,117 2,215 -98 -4.4%
Clayton 1,485 1,452 33 2.3%
Clinton 1,864 1,880 -16 -0.9%
Crawford 1,731 1,789 -58 -3.2%
Dallas 1,897 1,977 -80 -4.0%
Davis 1,006 1,001 5 0.5%
Decatur 757 757 0 0.0%
Delaware 2,110 2,081 29 1.4%
Des Moines 1,747 1,732 15 0.9%
Dickinson 1,921 2,011 -90 -4.5%
Dubuque 1,863 1,829 34 1.9%
Emmet 2,223 2,327 -104 -4.5%
Fayette 1,847 1,812 35 1.9%
Floyd 1,950 1,924 26 1.4%
Franklin 2,216 2,291 -75 -3.3%
Fremont 1,517 1,539 -22 -1.4%
Greene 2,039 2,133 -94 -4.4%
Grundy 2,416 2,491 -75 -3.0%
Guthrie 1,589 1,638 -49 -3.0%
Hamilton 2,526 2,647 -121 -4.6%
Hancock 2,226 2,286 -60 -2.6%
Hardin 2,291 2,401 -110 -4.6%
Harrison 1,527 1,558 -31 -2.0%
Henry 1,681 1,666 15 0.9%
Howard 1,474 1,451 23 1.6%
Humboldt 2,398 2,510 -112 -4.5%
Ida 1,940 2,002 -62 -3.1%
Iowa 1,775 1,798 -23 -1.3%
Jackson 1,607 1,599 8 0.5%
Jasper 1,845 1,856 -11 -0.6%
Jefferson 1,293 1,282 11 0.9%
Johnson 2,197 2,195 2 0.1%
Jones 1,773 1,784 -11 -0.6%
Keokuk 1,553 1,536 17 1.1%
Kossuth 2,325 2,431 -106 -4.4%
Lee 1,515 1,508 7 0.5%
Linn 2,252 2,288 -36 -1.6%
Louisa 1,953 1,952 1 0.1%
Lucas 854 855 -1 -0.1%
Lyon 1,911 2,000 -89 -4.5%
Madison 1,384 1,409 -25 -1.8%
Mahaska 1,585 1,572 13 0.8%
Marion 1,491 1,485 6 0.4%
Marshall 1,996 2,058 -62 -3.0%
Mills 1,595 1,618 -23 -1.4%
Mitchell 1,855 1,831 24 1.3%
Monona 1,433 1,468 -35 -2.4%
Monroe 1,010 1,004 6 0.6%
Montgomery 1,404 1,425 -21 -1.5%
Muscatine 2,119 2,139 -20 -0.9%
O'Brien 2,409 2,522 -113 -4.5%
Osceola 2,097 2,196 -99 -4.5%
Page 1,249 1,267 -18 -1.4%
Palo Alto 2,144 2,242 -98 -4.4%
Plymouth 1,975 2,038 -63 -3.1%
Pocahontas 2,329 2,437 -108 -4.4%
Polk 2,012 2,081 -69 -3.3%
Pottawattamie 1,628 1,656 -28 -1.7%
Poweshiek 1,779 1,798 -19 -1.1%
Ringgold 878 883 -5 -0.6%
Sac 2,125 2,217 -92 -4.1%
Scott 2,859 2,913 -54 -1.9%
Shelby 1,650 1,685 -35 -2.1%
Sioux 2,144 2,230 -86 -3.9%
Story 2,415 2,525 -110 -4.4%
Tama 1,927 1,983 -56 -2.8%
Taylor 1,006 1,016 -10 -1.0%
Union 1,066 1,072 -6 -0.6%
Van Buren 1,130 1,124 6 0.5%
Wapello 1,175 1,165 10 0.9%
Warren 1,500 1,522 -22 -1.4%
Washington 2,031 2,008 23 1.1%
Wayne 839 840 -1 -0.1%
Webster 2,473 2,592 -119 -4.6%
Winnebago 2,033 2,087 -54 -2.6%
Winneshiek 1,477 1,449 28 1.9%
Woodbury 1,587 1,628 -41 -2.5%
Worth 2,011 2,025 -14 -0.7%
Wright 2,489 2,604 -115 -4.4%
Additional information on the 1998
survey is available at the following web site:
http://www.extension.iastate.edu/Pages/communications/LandVal98/
Extension programs are available to all without regard to race, color, national origin, religion, sex, age, or disability.