Iowa farmland values shot up 7.8% over the last six months, with the sharp increase in commodity prices spurring most of the rise, according to the state’s ag land realtors.
The REALTORS Land Institute Iowa Chapter surveys its members every six months, and the latest survey, released March 10, indicates the average farmland value in Iowa jumped by 7.8% between September and March. That stands in stark contrast to the previous six months, which saw no change. The prior year (March 2019 through March 2020) showed a total increase of 0.9% (0.8% the first six months and 0.1% the next six months.
“This was the largest increase since spring of 2013,” said Elliott Siefert, a realtor with Hertz Farm Management in Nevada.
Government payments in 2020 coupled with a large rally in commodity prices in the past six months were factors, Siefert said. The northern part of the state showed the greatest increase in values with prices rising by 9.6% in North Central Iowa, 8.6% in Northeast Iowa and 8.3% in Northwest Iowa. Central Iowa values rose 7.8% and East Central Iowa went up 7.3%. West Central Iowa values jumped 8.2%. In Southwest Iowa, the figure rose 6.6%; in Southeast it was 6.5% and in South Central Iowa the figure rose 6.2%.
Timberland values for the state went up 7.9% and pasture rose 6.5%.
Siefert said investor interest in land was a factor in the increase as investors left the stock market in favor of farmland. COVID-19 factors may have also boosted the timber prices as urban people looked for rural property.
But the biggest factor appears to have been the increase in commodity prices.
The realtors do not publish a statewide overall dollar figure on land values but do issue numbers for high-quality vs. low quality land. The state-wide average for high-quality land increased from $9,379 to $10,086 per acre. For medium-quality land the figure rose from $7,241 to $7,790. And for low-quality crop land it went up from $4,973 to $5,392.
Non-tillable pasture went up from $3,082 to $3,284. Timber went up from $2,719 to $2,932.