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Serving: IA
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DEFIES LOGIC: In the last three years, Iowa has seen a disconnect between land values and the income that can be generated from farm ground.

Land values inch up despite low crop prices

Survey shows a disconnect between farmland prices and income-earning potential.

The farmland market across Iowa remains stable to slightly stronger this spring, depending on geography and farm specifics. The recently released Realtors Land Institute survey shows Iowa farmland values trending stronger by 2.9% since the September report, and nearly 5% stronger over the past 12 months.

The highest-quality farms from a production standpoint continue to sell well and outperform farms with poorer soils, waterways or other obstructions. Both farmers and investors are active in today’s market, although farmers are the more prevalent buyer. Continued low interest rates, good crop yields in recent years, and a slight uptick in the commodity markets since the beginning of 2018 have helped to support Iowa farmland prices.

There are also negative influences pressuring farmland values. Primarily, low commodity prices throughout much of the past four years, combined with several consecutive years of resulting weak on-farm profitability, continue to keep a lid on land values. Looking ahead in 2018 and beyond, the expectation for rising interest rates is giving pause to some would-be buyers and their lenders. Foreign trade worries have also entered the minds of many land market participants, with both NAFTA and Chinese trading relationships uncertain. For landowners concerned about farmland values dropping in the future, now may be a logical time to consider selling.

NORTHWEST

Clay County: West of Royal, 159 acres recently sold at public auction for $12,800 per acre. The farm has 155 tillable acres with a 96.8 CSR2 on primary soil types of McCreath, Gillet Grove and Sac. The sale includes 2018 farming rights and equals $135 per CSR2 point on tillable acres.

NORTH CENTRAL

Hancock County: Last month, 80 acres sold at public auction for $8,100 per acre. The farm consists of 80 tillable acres with a 79.2 CSR2. Sale equals $102 per CSR2 point on the tillable acres.

NORTHEAST

Chickasaw County: North of Deerfield, 115 acres sold for $7,500 per acre. The farm has 92 tillable acres with an 85.3 CSR2. Buyer is a local farmer, and the sale equals $110 per CSR2 point on the tillable acres.

WEST CENTRAL

Greene County: South of Churdan,149 acres sold at public auction for $10,000 per acre. The parcel has 145 tillable acres with an 81.7 CSR2. Sale equals $126 per CSR2 point on the tillable acres.

CENTRAL

Jasper County: North of Colfax, 152 acres sold in two parcels. Parcel 1 has 80 gross acres with 77 tillable acres and an 86 CSR2; this parcel sold for $10,700 per acre or $129 per CSR2 on the tillable acres. Parcel 2 has 72 gross acres with 68 tillable acres, and an 88 CSR2; this parcel sold for $10,600 per acre or $127 per CSR2 on the tillable acres.

EAST CENTRAL

Iowa County: South of Victor, 240 acres sold for $4,425 per acre. The farm has 212 tillable acres with a 53 CSR2. The sale equals $94 per CSR2 point on tillable acres.

SOUTHWEST

Page County: Southwest of Clarinda, 77 acres sold at public auction for $8,400 per acre. With 74 tillable acres and a 79.5 CSR2, the sale equals $110 per CSR2 point on the tillable acres.

SOUTH CENTRAL

Wayne County: South of Humeston, 136 acres sold at public auction for $2,125 per acre. The farm has 112 tillable acres with a CSR2 of 52.4; the balance of the parcel includes timbered draws suitable for recreational hunting. Sale equals $49 per CSR2 point on tillable acres.

SOUTHEAST

Keokuk County: West of Keswick,160 acres sold for $4,600 per acre at public auction. The farm has 112 tillable acres and a 66.5 CSR2. It’s important to note that 68 acres of the tillable land is enrolled in CRP, with a total annual payment of $16,819. The balance of the farm is comprised of English River timber bottom. The sale equals $99 per CSR2 point on the tillable acres. 

Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 800-593-5263 or visit hertz.ag.

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