Iowa Farmland Market Trends: Why 2025 Could Be a Strategic Year to Sell

As a farmland auctioneer and realtor, I’m constantly asked by farmland owners when the right time to sell is. The short answer? The market is always evolving, but if you’re considering selling in 2025, it’s crucial to understand the trends we’re currently seeing. The Iowa farmland market is in a period of rebalancing after hitting record highs following the pandemic, and this correction presents both challenges and opportunities for sellers.

Let’s break down the latest insights from the 2024 Iowa State University Land Value Survey and what they mean for you.

This week, the eagerly awaited findings of the 2024 ISU Land Value Survey was unveiled. This annual report has been a staple since 1950, providing valuable insights into Iowa’s farmland values across all 99 counties. The survey is a key resource for understanding the dynamics of land prices in the state and how they evolve year after year – compiled by a diverse group of professionals, including auctioneers, real estate land agents, farm appraisers, and farm managers, the survey revealed a small decrease.

Land Values: A Gradual Correction Post-Pandemic

In 2024, we saw Iowa farmland values decrease by 3.1%, bringing the statewide average to $11,467 per acre. This slight drop marks a shift after three consecutive years of gains, including the sharp price increases driven by pandemic-related factors such as high commodity prices, low interest rates, and government support programs.

While the decline may seem concerning, it’s actually a sign of the market returning to more sustainable levels. After the unprecedented highs of the past few years, a correction was inevitable. When adjusted for inflation, farmland values are 2.5% lower than in 2013. For sellers, this means the market is stabilizing—and understanding these trends can help you time your sale wisely.

Remember, these figures are based on a survey and reflect expert opinions. They are not a direct indication of what your specific farm is worth.

Factors Driving the Current Market:

According to the survey, here are the top factors placing downward pressure on farmland values:

Commodity Prices: After peaking in recent years, crop prices have softened, reducing farm revenues.

Interest Rates: Higher interest rates over the last two years have increased borrowing costs, which impacts land purchasing power. While rates may ease slightly in 2025, they remain elevated compared to pre-pandemic levels.

Input Costs: Elevated costs for seed, fertilizer, and fuel continue to squeeze profit margins, making some farmers cautious about expanding their landholdings.

However, it’s not all bad news. Several positive factors continue to support farmland values:

Strong Demand: Investors, recreational buyers, and neighboring farmers remain interested in purchasing land, keeping demand healthy in many regions.

Regional Highlights: Opportunities in Specific Areas

Not all regions in Iowa are experiencing the same trends. For example:

• The West Central District saw the largest decline at 7.4%, reflecting the pressure from commodity prices and borrowing costs.
• Conversely, the South Central District bucked the trend, with a 3.6% increase in land values, driven by investor interest and limited supply.
• O’Brien County continues to hold the highest land values at $15,921 per acre, despite a modest decline.
• Appanoose County saw a notable 7.7% increase in values, showing that localized demand can still drive growth.

It’s important to note that southern parts of Iowa typically lag behind northern Iowa by about a year. As northern Iowa experiences a correction, southern Iowa often follows suit the following year. This delayed reaction helps explain why some southern regions are still showing increases in land values this year.

If your farmland is in an area experiencing stronger demand or investor interest, 2025 could be the perfect time to capitalize.