Average Value Of Iowa Farmland Tops $3,900

ISU’s annual survey shows the rise in 2007 is greatest since 1976.

The average value of an acre of farmland in Iowa increased by just over $700 during 2007, to an all-time high of $3,908, according to the annual survey conducted by Iowa State University Extension. “The land boom is being driven by the developing biofuel economy,” points out Mike Duffy, ISU extension farm economist who conducts the survey. The survey results for 2007 were released December 18 at a press conference at ISU in Ames.

Duffy says the 22% increase recorded this year is the greatest one-year increase since 1976, and marks a new record for the fifth year in a row. Since the year 2000, Iowa land values have increased an average of $2,051 per acre, more than a 100% increase over the 2000 average value of $1,857.

The increases in values were reported statewide, with the survey recording averages above $5,000 an acre in five counties, and between $4,000 and $5,000 an acre in 51 counties. Nineteen counties reported increases of more than 25%, and 59 counties had increases between 20 and 25%.

Is land market headed for a crash?

Duffy notes that some of the smaller percentage increases occurred in the counties and crop reporting districts along Iowa’s eastern and western borders. He says this reflects the impact of local demand for corn from ethanol plants. Counties along the border rivers previously received the best prices for crops due to low transportation costs to gulf port markets, but now those crops are being used locally by the ethanol plants, which is driving up prices in interior counties.

Duffy says he frequently is asked whether the land market will crash, and how high it might go before it tops out. He also is questioned about the impact of the weakening dollar, the new farm bill, and the current subprime mortgage crisis. “My general feeling is that the land market will remain strong for at least the next five years,” he responds. “We have seen a fundamental shift in demand for corn due to ethanol production. I don’t think this demand will diminish in the near future.”

“The world of agriculture as we know it here in Iowa has changed,” says Duffy. “Where the changes will settle out and when is not known.”


Northwest Iowa has highest land price


Of the nine crop reporting districts in the state, northwest Iowa reported the highest average value at $4,699 per acre for 2007. The lowest average in the state was in south central Iowa at $2,325 per acre. north central Iowa was the leader in percentage increase at 25.3%, while east central Iowa had the lowest percentage increase at 14.7%.

The highest county average in the state was Scott County at $5,699 per acre, while Decatur County was lowest at $1,828 per acre. Sioux County led the state with the largest dollar increase at $1,142 per acre, while Floyd County had the largest percentage increase at 30.3%.

Low grade land in the state averaged $2,655 per acre, an increase of $460 or 21% over the 2006 survey. Medium grade land averaged $3,666 per acre, a $655 increase or 21.8%. High grade land averaged $4,686 per acre, an increase of $851 or 22.2%.

High grain prices drive demand for land

Survey participants were asked to indicate positive and negative factors that affected land prices during 2007. Good grain prices was by far the most frequently mentioned positive factor, listed by 35% of the respondents. Another 10% mentioned low interest rates as a major factor.

Three negative factors impacting land values were listed by more than 10% of the respondents. They included high costs for the inputs needed to grow crops, listed by 25%; high land prices in general, listed by 12%; and a concern over how long the market would remain at high levels, listed by 11%.

Of the respondents to this year’s survey, 37% reported more land sales in 2007 than in the previous year. That was the highest percentage since 1988. Buyers were existing farmers in 60% of the sales, and investors in 34% of the sales, essentially unchanged from the previous year, but down considerably from a decade ago when existing farmers represented nearly 75% of the buyers.

Data on farmland sales has been collected by ISU 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 November 1. Average response is 500 to 600 completed surveys, with 499 usable surveys returned this year. Respondents provided 668 individual county estimates, including land values in nearby counties if they had knowledge of values in those counties.

Additional detail on the 2007 survey is available on the ISU Extension web site at www.extension.iastate.edu/landvalue/

The following chart indicates 2007 values by crop reporting district and county, 2006 values, dollar change from 2006 to 2007, and percentage change from 2006 to 2007.

2007 2006 $ change % change
Northwest 4,699 3,783 916 24.2%
North Central 4,356 3,478 879 25.3%
Northeast 4,055 3,187 868 27.2%
West Central 4,033 3,410 623 18.3%
Central 4,529 3,716 812 21.9%
East Central 4,272 3,725 547 14.7%
Southwest 3,209 2,580 629 24.4%
South Central 2,325 1,927 399 20.7%
Southeast 3,463 2,849 614 21.6%
State Average 3,908 3,204 704 22.0%


2007 2006 $ change % change
Adair 2,742 2,198 544 24.7%
Adams 2,688 2,203 485 22.0%
Allamakee 2,640 2,126 514 24.2%
Appanoose 1,908 1,564 344 22.0%
Audubon 3,991 3,311 680 20.5%
Benton 4,485 3,619 866 23.9%
Black Hawk 5,083 3,952 1,131 28.6%
Boone 4,680 3,917 763 19.5%
Bremer 4,603 3,621 983 27.1%
Buchanan 4,518 3,562 956 26.8%
Buena Vista 4,846 3,914 932 23.8%
Butler 4,398 3,458 940 27.2%
Calhoun 4,878 3,958 920 23.2%
Carroll 4,434 3,581 854 23.8%
Cass 3,598 2,950 648 22.0%
Cedar 4,429 4,012 417 10.4%
Cerro Gordo 4,439 3,567 872 24.5%
Cherokee 4,466 3,581 885 24.7%
Chickasaw 3,767 2,909 858 29.5%
Clarke 2,213 1,811 402 22.2%
Clay 4,506 3,612 894 24.7%
Clayton 3,610 2,919 691 23.7%
Clinton 3,798 3,285 513 15.6%
Crawford 4,013 3,254 759 23.3%
Dallas 4,327 3,385 942 27.8%
Davis 2,406 1,956 450 23.0%
Decatur 1,828 1,465 364 24.8%
Delaware 4,628 3,866 762 19.7%
Des Moines 3,899 3,179 720 22.7%
Dickinson 4,210 3,404 805 23.7%
Dubuque 4,239 3,513 726 20.7%
Emmet 4,515 3,721 794 21.3%
Fayette 4,144 3,337 807 24.2%
Floyd 4,325 3,320 1,005 30.3%
Franklin 4,329 3,518 811 23.1%
Fremont 3,478 2,832 646 22.8%
Greene 4,235 3,470 765 22.0%
Grundy 4,985 3,996 988 24.7%
Guthrie 3,675 2,963 711 24.0%
Hamilton 4,934 4,097 836 20.4%
Hancock 4,381 3,592 789 22.0%
Hardin 4,482 3,667 816 22.2%
Harrison 3,773 3,093 680 22.0%
Henry 3,668 3,073 596 19.4%
Howard 3,400 2,621 780 29.7%
Humboldt 4,689 3,873 816 21.1%
Ida 4,426 3,668 757 20.6%
Iowa 3,785 3,131 654 20.9%
Jackson 3,501 2,931 569 19.4%
Jasper 3,929 3,301 629 19.1%
Jefferson 2,811 2,375 436 18.3%
Johnson 4,579 3,911 668 17.1%
Jones 3,719 3,147 572 18.2%
Keokuk 3,262 2,836 427 15.0%
Kossuth 4,537 3,707 830 22.4%
Lee 3,602 2,893 709 24.5%
Linn 4,638 3,983 656 16.5%
Louisa 3,997 3,413 584 17.1%
Lucas 2,098 1,672 426 25.5%
Lyon 4,458 3,447 1,011 29.3%
Madison 3,316 2,644 672 25.4%
Mahaska 3,547 2,963 584 19.7%
Marion 3,555 2,925 629 21.5%
Marshall 4,103 3,433 670 19.5%
Mills 3,827 3,095 732 23.6%
Mitchell 4,235 3,252 983 30.2%
Monona 3,452 2,838 613 21.6%
Monroe 2,454 1,981 473 23.9%
Montgomery 3,167 2,630 536 20.4%
Muscatine 4,183 3,647 536 14.7%
O'Brien 5,306 4,255 1,051 24.7%
Osceola 4,687 3,640 1,046 28.7%
Page 2,823 2,372 451 19.0%
Palo Alto 4,392 3,525 867 24.6%
Plymouth 4,802 3,830 972 25.4%
Pocahontas 4,663 3,830 832 21.7%
Polk 4,234 3,487 747 21.4%
Pottawattamie 4,072 3,294 778 23.6%
Poweshiek 3,776 3,124 651 20.8%
Ringgold 2,126 1,726 400 23.2%
Sac 4,745 3,824 921 24.1%
Scott 5,699 5,073 626 12.3%
Shelby 4,057 3,287 770 23.4%
Sioux 5,204 4,063 1,142 28.1%
Story 4,852 4,021 831 20.7%
Tama 4,123 3,320 802 24.2%
Taylor 2,435 1,948 487 25.0%
Union 2,622 2,085 537 25.8%
Van Buren 2,642 2,159 484 22.4%
Wapello 2,719 2,237 482 21.5%
Warren 3,588 2,935 653 22.2%
Washington 4,289 3,624 665 18.4%
Wayne 1,947 1,596 351 22.0%
Webster 4,779 4,040 739 18.3%
Winnebago 4,054 3,238 816 25.2%
Winneshiek 3,413 2,720 693 25.5%
Woodbury 3,570 3,014 557 18.5%
Worth 4,162 3,268 895 27.4%
Wright 4,807 3,988 819 20.5%


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