Iowa Farmland Prices Report October 15, 2021
Jason J Smith
Auctioneer & Land Broker
Jason is an experienced farmland broker and auctioneer with extensive experience in farmland sales across this Midwest. Jason has worked with hundreds of clients to create advantageous outcomes. If you are selling land schedule a consultation with Jason by calling or using the calendar.
Welcome back to the Iowa Farmland Prices Report! Its been a beautiful week in Iowa! Harvest is moving along very nicely this year with a few short rain stops but for the most part, it’s been a text book harvest across the state. My cover photo this week is of my two sons watching the combine move through our field at our home. They love to just sit on the edge of the field and watch the back and forth progress or even hop in the combine and take a few rounds.
This Week Iowa Farmland Average breaks $12,000 per acre
Back in August of 2021, the NASS report saw Iowa farmland value increase, but not to the extend we are witnessing a few months later now. They indicated a value for Iowa cropland at the time – near $7,810 per acre. In this weeks report, we see farmland sales averaging over $12,000 per acre in a sample of sales over 3,500 acres. I’ll have more below!
WASDE Report Pressures Corn and Soybeans
A big report this week sent soybean prices significantly lower which had been their trend. The WASDE report put pressure on both corn and soybean prices which have recovered slightly since the initial report came out. Like every Fall, we see this back and forth movement in the market based on USDA reports that can impact farmland prices and buyer sentiment. It has always amazed me how closely moods track along with these reports. Some with significant lasting effects and others just a week. I doubt this has much impact (at least short term) for farmland prices and the rebound signals that.
Iowa Land Prices at A Glance
Our Iowa Farmland Price Heatmaps have been a huge help for people that want to visiuliaze and research farmland prices in Iowa. Here you can research your farm’s proximity or the statewide market and see individual sale results, average prices per acre, average price per CSR2 point as well as volumes of sales and the number of acres sold. Use this market price research tool right here at DreamDirt. Click the Iowa map to get started.
Iowa Farmland Sales News This Week
Look at the spreads this week on farmland prices in Iowa. This week we see a much more pronounced spread with a low of $87.82 per CSR2 point in Monona County and a high of $200.55 in Mahaska County. I think that may be the biggest one week spread in lowest to highest farmland prices I have witnessed. Still, the core of our farmland prices this week remains between $130 and $160 per point. The average of all farmland sales this week was down slightly but landed at a very hefty $154.24 per CSR2 point and that was a solid test on 3,592 acres sold. The most impressive aspect of this weeks sales, an average farmland price in Iowa of $12,366.07 per acre! That is incredible when you consider that the last Iowa State University report in December 2020 came in at $7,551 and the NASS report back in August 2021 indicated an average price of land of $7,740. This shows the recent explosion in farmland prices across the state of Iowa fueled by higher commodity prices, low interest rates and a long period of low sales volume. While many of those positive factors were set up and in place for this to happen, the market reaction will always be to drive prices down by introducing factors to the market that counter those pre-existing elements. The added element of investors in the market is almost like a tornado inside of a tornado.
Many investors have had a good run in the stock market lately but many of them are growing more fearful and while the situation continues to materialize what we are seeing in Iowa’s farmland market is a fair amount of profit taking from land holdings where investors are selling off farmland they have held to take advantage of the high prices but seeming to find the only option they have with the proceeds is to go back to land so you have investors in the market as both buyers and sellers right now. Again, very similar to what we experienced in 2011-2013.
Week after week, I have said eventually the supply will meet the demand. We are on that path now. I spent a few hours this week taking inventory and could find over 307 high quality farms that are available or will be sold before the end of the year. Every day since I have either signed up new sellers for auctions or saw others hitting the market. That will pressure the top prices we are seeing, to what extent – we won’t know for a few months. I suspect we’ll see it slow over our weekly reporting.
Rachel Hoy is a licensed real estate agent and auctioneer at DreamDirt. You can reach her at 515-954-8063 or email [email protected]
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