Rise in Iowa Land Prices Not Seen as a Market Rebound

The difficulties of 2019 for agriculture have been numerous. One positive note at the end of the year is a two percent rise in the price for farmland in Iowa. Favorable interest rates, strong yields, and limited land supply combined to push Iowa’s farmland values up for just the second time in the past six years. An Iowa State University news release says the statewide value of an acre of farmland is estimated at $7,432. That’s a 2.3 percent increase, totaling about $168, since last year. That number represents the average of low, medium, and high-quality farmland prices. An Iowa State University expert says that the reprieve in the land market isn’t driven by a stronger ag economy. “The recent modest increases in land values reflect a lower interest rate environment and slowly improving U.S. farm incomes,” says Dr. Wendong Zhang, leader of the Iowa Land Value Survey effort. While the growth in land values is positive, Zhang says it shouldn’t be thought of as a “sound rebound” in the land market. “Market Facilitation Payments helped to stabilize farm income and the land market,” he adds. “However, escalation of the U.S. and China trade war will put more downward pressure on farm income and land prices.”