Iowa cropland values eased 1% in the six-month period ending March 1, according to the Iowa Chapter of the Realtors Land Institute (RLI). While a decrease, the semi-annual survey of land professionals found the rate of decline since the middle of last year eased significantly.
Matt Vegter and Rebecca Frantz, both of Hertz Farm Real Estates Services, Nevada and Mt. Vernon, respectively, note the RLI’s previous survey found a 5% decline for the six-month period ending September 1. “Combining the two surveys results in a 6% decrease in the value of Iowa cropland on an annual basis,” Vegter states.
He notes strong corn and soybean yields coupled with a rally in both corn and soybean prices during the period may have combined to limit the decrease in farmland values since September. However, the key factors impacting cropland values remain similar to those found in the RLI survey of a year earlier, says Frantz. These are: 1. Low commodity prices; 2. Higher interest rates; 3. Low supply of offerings; 4. General economy and 5. Government support – the least important factor.
Looking at the nine Iowa crop reporting districts, Vegter notes the North Central district reports the steepest decline at -2.1%. The South Central district, with its +0.2% reading, is the only crop district with a positive listing.
Looking at crop districts on an annual basis, the East Central district shows the steepest decline at -7.3% and the Southeast district lists the shallowest decrease at -4.4%.
From a longer-term perspective, Frantz notes since 2000, the RLI state average rose 44% in three years before easing 10% the past two years.
The RLI survey also covers pastureland and non-tillable timber. Vegter reports pastureland values remain firm, statewide. However, the value of non-tillable timber ground is up 8% to 9%, “which shows continuing strong demand for recreational ground,” he notes.
“Overall,” he says, “it appears Iowa cropland is a sideways market right now. We still hear and see high-quality land selling at a premium. But the tariff situation is causing uncertainty. The supply of farms for sale is low. Meanwhile, demand for recreational ground is still strong.”
Looking five years ahead, Frantz says survey respondents still expect cropland values to rise 1% to 10% -- their same response a year earlier. In addition, at 70% farmers and farmers with 1031 money still account for the bulk of buyers, she says. Another 20% of buyers are local investors and 10% are non-local investors.