After falling by 10 percent since 2013, farmland values in Iowa, the No. 1 corn state in the nation, are marginally higher, with the recovery expected to continue into the future, says Successful Farming. “We think the bleeding has stopped,” said Iowa State University economist Wendong Zhang at ISU’s annual soil management and land value conference.
According to ISU’s survey of farmers, farm managers, land owners and bankers, farmland is worth an average $7,863 per acre statewide, up from $7,183 an acre in 2016. Participants said land values are likely to fall marginally in 2018 but climb to an average $8,307 in 2020 and $9,632 an acre in 2025, said Successful Farming. Zhang said there is no statistical difference between land prices in 2016 and this year, “but the near-term outlook is for the land values to stay flat vs. falling any further … Gradually, the survey tells us that farmland values are going to pick up in the next five years.”
Cash rental rates for farmland are down in 2017 despite the stabilization of land values. The ISU survey pegged cash rent at an average $219 an acre, compared to $230 an acre last year. A panel of ag lenders was unwilling to project whether rental rates would rise or fall in 2018.