PRIMGHAR, Iowa — Recently, land leasing and land value survey information was 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/acre (negative 5.9 percent) from November, 2015. The highest land values were reported in Northwest Iowa ($9,243/acre) which was lower by 4.6 percent from last year. Positive factors bolstering values are lower interest rates, strong balance sheets and working capital accumulations from the 2000s. The single largest negative factor, not surprisingly, is lower commodity prices that contributed to a 17.2 percent reduction to 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 farmland cash rental rates declined for the 4th consecutive year. The statewide average rates decreased by $10 per acre from 2016. Northwest Iowa (District 1) showed a decline of $14/acre (negative 5.6 percent). Many of the factors discussed in regards to land values, can similarly relate to the 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 soon release the Aug 1-15 schedule for our annual Northwest Iowa Land Leasing and Value meetings. These meetings are offered to 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 reference book to augment the information provided at the meeting. For more information about upcoming Land Leasing and Value meetings in your area, contact your local ISU Extension and Outreach office. Pre-registration is requested to allow for planning of resources.
— Gary Wright, Farm and Agribusiness Management Specialist
Iowa State University Extension and Outreach
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