Farmland Owners Workshop In Central Iowa Feb. 14

Farmland Owners Workshop In Central Iowa Feb. 14

Iowa State University Extension is holding a meeting for Iowa farmland owners on Friday, Feb. 14 at Altoona.

Iowa State University Extension and Outreach of Polk County is conducting a farmland owners workshop on Friday, February 14 in central Iowa. It will be held at the ISU Extension office at Altoona, on the northeast edge of Des Moines.

Participants will learn about:

Iowa Farmland Value Trends & Issues

2014 Tax Law Changes

Understanding the New CRS2 Soil Ratings

2014 Farm Profitability Outlook

The topics will be presented in two morning break-out sessions and two afternoon break-out sessions. The meeting starts at 9 a.m. with doors opening at 8:30 a.m. at the Polk County ISU Extension Office, located at 1625 Adventureland Drive, Suite A, in Altoona. The workshop will last until 3 p.m. with lunch.

REGISTER NOW: Owners of farmland and anyone else interested in that topic are encouraged to attend a Farmland Owners Workshop at Altoona on February 14. The meeting, sponsored by ISU Extension, will discuss Iowa farmland value trends and issues, the new CSR2 soil ratings system and 2014 farm profitability outlook. Pre-registration is required at least two days prior to the workshop.

Pre-registration is required at least two days before the workshop at $35 per individual or $50 per couple, payable at the door. Contact the Polk County Extension office at 515-957-5760 to pre-register on or before February 12 or to get more details.

ISU's annual survey shows Iowa land values up 5% on average in 2013

The annual survey of Iowa farmland values conducted by ISU Extension economist Mike Duffy in November 2013 found that prices for land increased on average by 5.1% from November of 2012. Values increased in 2013 for the fourth year in a row and achieved historic peaks. In 2004, for example, an acre of Iowa farmland cost $3,250 (in inflation-adjusted dollars) on average. Today, according to the ISU survey, an acre of Iowa farmland averages $8,716—an increase of 168%.


Steve Johnson, ISU Extension farm management specialist in central Iowa, writes an online newsletter called "Farmland Owners Update." In his January newsletter (which follows below), Steve discusses results of the 2013 Iowa Farmland Value Survey.

Have Iowa farmland values peaked?

Examining some causes for the current increase in farmland values and the reactions is helpful in assessing the situation. Farmland values are highly correlated with gross farm income, Duffy points out. A majority of the survey respondents were concerned about income. More than three-fourths, 76%, of the respondents cited lower commodity prices as a negative factor affecting the land markets. Data show the rate of increase in land values slowed and commodity prices started dropping after June 2013.

Iowa corn and soybean price movements are good indicators of the direction for gross farm income. The November estimated cash corn price for Iowa was 39% lower than the November 2012 price. Soybean prices were 11% lower. However, Iowa's average corn yield increased by 23% over that of 2012 and the soybean yield was 1% higher.

There are many competing forces that will influence prices over the coming years. The Iowa State economist indicates that, for now, it appears there are more factors that will lead to lower prices as opposed to returning to levels of the past few years.

Currently, there are more factors stacking up that will likely lead to lower land prices than to higher land prices

"Farm income is a strong indicator for the direction land values will go, but there are other factors as well," Duffy says. "Interest rates remain low, but a higher percentage of survey respondents indicated less sales than in 2012, which was the highest it's been since 1985."

The odds are against a major collapse in land values. But, if projections for a new lower level of commodity prices hold, then Duffy believes we should expect land values to drop. The economist says many of the 476 respondents commented in the survey that the current land value situation might be at a plateau.


Low-grade land in the state averaged $5,298 per acre and showed a 3.5% increase or $179 per acre, while medium grade land averaged $8,047 per acre; high-grade land averaged $10,828 per acre. The lowest land value was estimated in the South Central Crop Reporting District, $4,791, while the lowest percentage decrease was in the Northwest Crop Reporting District with a 3.9% decrease. The Southeast Crop Reporting District reported a 13.3% increase, the highest district percentage reported. Maps showing 2013 values, percentage change and comparisons to 2012 data and additional information from Duffy are available online.

In 2013 U.S. net farm income increased by 15%—as estimated by USDA

The January ISU "Farmland Owners Update" newsletter also has the following report about USDA's latest farm income estimate for 2013.

According to the USDA Economic Research Service, net farm income is forecast to be $131 billion in 2013, up 15.1% from 2012's estimate of $113.8 billion. After adjusting for inflation, 2013's net farm income is expected to be the highest since 1973. Substantial year-end crop inventories are expected as a result of the record corn harvest. Net cash income-which measures the difference between cash expenses and the combination of commodities sold during the calendar year plus other sources of farm income-is forecast at $129.7 billion, down just more than 3% from 2012. Even so, 2013's forecast would be the fourth time net cash income, after adjusting for inflation, has exceeded $100 billion since 1973.

The projected $10.9-billion increase in total expenses in 2013, to $352 billion, continues a string of year-to-year increases (except for 2009) since 2002. In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record. Labor and rent are the expense items expected to increase the most in 2013, while producers are expected to pay less for fuel and fertilizer.

Farm sector assets, debt, and equity are all forecast to increase in 2013. As in the last several years, increases in farm asset value are expected to exceed the increases in farm debt, with farm real estate the main driving force. Confirming the strength of the farm sector's solvency, both the debt-to-asset ratio and debt-to-equity ratio are expected to reach historic lows.

For farm management information and analysis visit Ag Decision Maker; ISU farm management specialist Steve Johnson's site is available here.

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