PRIMGHAR, Iowa — Key information from an updated land value survey and a cash rental rates survey was recently announced by ISU Extension and Outreach.
The Land Value Survey, conducted by the Center for Agricultural and Rural Development (CARD), was initiated in 1941 (the first in the nation), and sponsored annually by Iowa State University. Survey respondents totaled 877 this year (November 2017), and are comprised of individuals “knowledgeable of land market conditions,” e.g. licensed real estate brokers, appraisers, farm managers, agricultural lenders and county assessors. Only the state average and the district averages are based directly on the ISU Land Value Survey data. The county estimates use a procedure that combines the ISU land survey results with data from the USDA.
This ISU Extension and Outreach Land Value Survey, based upon reported expert opinions, is included in a new web portal (https://www.card.iastate.edu/farmland) that can facilitate the analysis of farmland values by pooling data from ISU, USDA, Chicago Fed and the Realtor Land Institute. The survey is not intended to provide a direct estimate for any one specific piece of property. Land value surveys can provide a good indication of land value trends, geographical land-price relationships and factors influencing the Iowa land market.
After falling for the three previous years, land values increased an average of 2.0 percent ($143/acre) in Iowa since November 2016. The statewide average of $7326/acre represents the average of low-, medium- and high-quality farmland. The highest land values were reported again in Northwest Iowa ($9388/acre) which was a gain of 1.6 percent (from $9243/acre). Most common positive factors influencing land prices included limited farmland sales (vs. strong demand), along with favorable interest rates, strong crop yields and the availability of cash and credit. The single most negative factor, not surprisingly, was the currently strained farm operating margins, i.e. lower commodity prices and high input prices, along with the more long-term agricultural uncertainties. Given stagnant farm incomes and rising interest rates, this modest increase may be just a temporary break in the downward trends. Readers are encouraged to review the full land value survey report.
A larger proportion of farmland is leased in Iowa, making a strong landlord/tenant relationship important for the efficient, long-term allocation of Iowa’s valuable resource. ISU Extension and Outreach will be hosting seventeen Northwest Iowa Land Leasing/Value meetings beginning Aug 1 and ending August 16. These meetings will address questions that landowners, tenants and other ag 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 discussed at the meeting.
For more information about upcoming Land Leasing and Value meetings in your area and cash rental rates, visit https://www.extension.iastate.edu/agdm/articles/plastina/PlaMay18.html, or call your local ISU Extension and Outreach county office. Pre-registration for Farmland Leasing and Value Meetings is requested to allow for better planning of resources.
Please contact Gary Wright, Farm Management Specialist, with any questions or feedback about the research information contained in this article.
— Gary Wright, Farm and Agribusiness Management Specialist, Iowa State University Extension and Outreach
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