PRIMGHAR, Iowa — Key information from an updated land value survey and a cash rental rates survey was recently announced by Iowa State University (ISU) Extension and Outreach.
The Land Value Survey was initiated in 1941. Survey respondents totaled 518 this year (November 2016), and are comprised of individuals “knowledgeable of land market conditions,” (e.g. real estate brokers, farm managers, agricultural lenders and county assessors). This ISU Extension and Outreach survey information is one of four sources of information (the others being USDA, Chicago Fed and Realtor Land Institute), that when taken together, are reliable and research-based land value estimates. The ISU Extension and Outreach survey is the only data source that provides an annual land value estimate by county. The survey is not intended to provide a direct estimate for any one specific piece of property; however, land value surveys can provide a good indication of the direction of change, based upon the opinions expressed.
For the third year in a row, land values declined. Statewide, the average reduction was $450 per acre (negative 5.9 percent) from November 2015. The highest land values were reported in Northwest Iowa ($9,243 per acre) which was down by 4.6 percent from the previous year. Positive factors bolstering values are lower interest rates, stronger yields and limited land supply (vs. strong demand). The single largest negative factor, not surprisingly, is lower commodity prices that contributed to a 17.2 percent reduction in net farm income to $66.9 billion (August 2016) – the lowest since 2009. Readers are encouraged to review the full survey report at http://www.card.iastate.edu/land-value/2016/2016-Iowa-Land-Value-Survey-Overview.pdf.
The 2017 Cash Rental Rates for Iowa Survey conducted by Iowa State University showed that typically, average farmland cash rental rates declined for the fourth consecutive year. The statewide average rates decreased by $11 per acre from 2016 (4.8 percent). Northwest Iowa (District 1) showed a decline of $14 per acre (5.6 percent). Many of the positive and negative factors discussed in regards to land values, similarly relate to the farmland leasing economies. You can access the complete survey findings here: https://store.extension.iastate.edu/Product/1841.
Because of the larger proportion of leased farmland in Iowa, a strong landlord/tenant relationship is important for the efficient, long-term allocation of Iowa’s valuable resources. ISU Extension and Outreach will be hosting eleven Land Leasing and Value meetings beginning August 3 and ending August 17, 2017. These eleven meetings will address questions that landowners, tenants and other agriculture stakeholders may have about leasing farmland. Attendees will gain an understanding of the current cash rental rate surveys, and discuss factors driving 2018 lease rates (e.g. market trends, input costs, etc). Each registrant will receive a 100-page reference book to augment the information discussed at the meeting. For more information about upcoming Land Leasing and Value meetings in your area, visit http://www.extension.iastate.edu/obrien/news/2016-northwest-iowa-farmland-lease-and-value-meetings-scheduled or call your local ISU Extension and Outreach office. Pre-registration is requested to allow for planning of resources.
Also, please contact Gary Wright, Farm Management Specialist with ISU Extension and Outreach, at 712-223-1574 or email@example.com with any questions or feedback about the research and information contained within this article.
— Gary Wright
Farm Management Specialist
Iowa State University Extension and Outreach
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