Iowa Farmland Holds Onto Its Value Despite 2020's Many Challenges
Despite a turbulent year, Iowa State University’s annual survey of land values found the average value of farm fields, pasture, timber and other agricultural lands held steady.
Wendong Zhang, an economist at Iowa State University, conducted the study and presented the results on Tuesday. He says on average, as of Nov. 1 the value of an acre of Iowa farmland was $7559.
“This represents about 1.7 percent growth” compared to last year, he says. The survey calculates values after collecting data from appraisers, bankers, realtors and others working professionally in agricultural real estate.
Zhang cautions that these figures do not adjust for inflation.
“When you are thinking about the inflation-adjusted values, it’s still not representing an increase,” he says. “However, it does represent a surprisingly resilient and strong and robust land market.”
Not all areas saw the same changes. Overall, the survey found the lowest quality land increased the most in value while the value of the highest quality land remained flat.
While land values remain below the 2013 peak, Zhang points out this is the second consecutive year of increases—and the third in the past six years.
Farm incomes increased this year thanks largely to ad-hoc payments from the federal government. Zhang says as the pandemic recedes with vaccines, and crop prices increase, those payments may go away, which potentially could push down incomes and land values next year.