MONEY

Cropland values in Iowa dip 3.4% in past 6 months

Matthew Patane
mpatane@dmreg.com

Iowa's cropland values fell during the last six months, pushed down by lower prices for corn, soybeans and other commodities.

Cropland value fell 3.4 percent, according to an Iowa Realtors Land Institute report released Wednesday.

Iowa's cropland had an average value of $8,000 an acre as of Sept. 1, down from about $8,222.67 an acre in March. Those values only include tillable Iowa cropland, not pastures or timber.

The state has seen its average crop prices fall 8.8 percent in the last 12 months.

"The commodity prices probably account for 80 to 90 percent of the decrease in the land market," said Kyle Hansen, an accredited land consultant with Hertz Farm Management. He is chairman of the Iowa Realtors Land Institute's Land Trends and Values Committee.

Corn has been selling for between $3.40 and $3.60 per bushel in September, down from around $5 per bushel a year ago.

Soybeans have seen a similar trend, selling for slightly less than $10 per bushel in September, down from just less than $12 per bushel a year ago.

Hansen said the year-over-year decline does not indicate cropland prices are in a bursting bubble. Rather, he said land prices are coming down to a more stable level after a period of fast growth.

"This gives a good, solid indication that we are down, but we're coming down slow," Hansen said. "That's why it's not a big bubble bursting. It's a slow deflation down to where we are stable."

The Realtors Land Institute report is produced every March and September. It surveys farmland specialists on how they view the status of Iowa farmland.

Prices for high-quality cropland in the state fell to $10,724 an acre in September, down 8 percent from $11,661 an acre a year ago, according to the report.

The report also breaks down land prices in nine regions of the state.

Every region, except for the south central and southeast parts of Iowa, saw prices decline from March to September.

Despite the price declines, cropland values are still higher than in September 2012, a banner year for Iowa's farmers.

The state's farmers reported a net income of about $9.3 billion in 2012, according to the U.S. Department of Agriculture. That's the second highest amount behind a record $10.9 billion in 2011.

Price per acre

The average value for an acre of high-quality cropland in Iowa fell 8 percent from a year ago, but land values are still up from 2012 and nearly double where they were in 2010. Below are the average values for an acre of high-quality cropland measured each fall over the past five years are:

2014: $10,724

2013: $11,661

2012: $10,445

2011: $8,330

2010: $5,510

Source: Iowa Realtors Land Institute