The average value of an acre of Iowa farmland is up 29 percent this year compared to last year, a “dramatic increase” according to an Iowa State University survey.
One acre of low, medium and high quality farmland across the state has an average value of $9,751, which is nearly $2,200 higher than the average value per acre in 2020.
It’s a record high in the 80 years of Iowa State University’s Land Value Survey, but if you account for inflation, the value is still lower than in 2012 and 2013, said Iowa State University economist Wendong Zhang, who led the study.
“After some modest declines and a stagnant land market for a couple years, we are seeing dramatic increase,” Zhang said.
Zhang shared the survey’s results on Tuesday. He said higher corn and soybean prices, low interest rates and robust crop yields are big contributors to the rising land values.
“The bottom-line is that we are still in the sense that because of the drastic cuts of the interest rate in last year, we offset all the effects of the previous hikes,” Zhang said.
The only other times land values jumped up by near 30 percent were in 2011 and the 1970s. In 2011, land values rose 32.5 percent because of increasing demand for ethanol and higher commodity prices.
Land values increased in all of Iowa’s 99 counties. Clayton and Allamakee counties both reported a 36.4 percent increase in value, the biggest percentage increase of every county in the state.
