Unlocking the Value of Iowa Farmland: A Comprehensive Guide to Current Land Prices and Expert Insights - April 2024 Report

Welcome to Our Monthly Iowa Farmland Value Report

In this monthly report, we dive into Iowa farmland values, helping you understand the factors that determine what your farm is potentially worth. Our goal as auctioneers and farmland real estate agents is to provide you with up-to-date information, recent sales data, expert insights, and tips for maximizing the potential value of your farmland sale. Let us answer the questions you have about selling farmland in Iowa. Contact us today for a free consultation.

Understanding Iowa Farmland Values:

Factors Influencing Farmland Values in Iowa

Iowa’s agricultural landscape is influenced by a multitude of factors. In this blog, we will explore how commodity prices, interest rates, government policies, and regional conditions impact the current market values.

The availability of farmland has begun to dwindle, yet prices continue to rise steadily. Despite persistently high interest rates, the strong demand for prime farmland is sustaining and even boosting its value. This year is shaping up to be particularly challenging for farmers, as many are rushing to plant their crops amidst these conditions. The competition for quality farmland remains fierce, making it increasingly difficult for new and expanding farmers to secure land. As farmers navigate these dynamics, the interplay between limited land availability, high costs, and the urgency of planting seasons will be critical to watch.

The monthly Rural Mainstreet Report provides a thorough analysis of the overall farm economy. In the April report, the following summary was highlighted.

• The overall Rural Mainstreet Index has remained below growth neutral for the eighth consecutive month.
• Only 0.9% of bankers observed an increase in farm delinquency rates over the last six months.
• Farmland prices have risen for the 53rd month in a row.
• The farm equipment sales index has dipped below growth neutral for the 10th time in the last 11 months.
• About half of the bank CEOs indicated that ethanol production is crucial to their local economy.
• Trade data from the International Trade Association reveals that regional exports of agricultural goods and livestock have decreased by 7.2% year-to-date in 2024 compared to the same period in 2023.

The Rural Mainstreet Report conducts a state-by-state analysis, and its findings for Iowa in April are noteworthy.

In April, the state’s RMI rose to 36.7 from 34.5. Iowa’s farmland price index also saw an increase, moving up to 52.1 from 51.4 in March. The new hiring index in Iowa for April improved significantly, reaching 52.1 compared to 46.8 in March. Trade data from the International Trade Association indicates that exports of agricultural goods and livestock have increased by 16.8% year-to-date in 2024 compared to the same period in 2023.

Recent Farmland Sales Data

Let’s dive into the latest sales data, including county location, land size by acre amount, soil productivity ratings, and sale prices per acre and total price in the table below. By analyzing this data, you can get a clearer picture of how your property may be valued in the current market.

Current Average Price Per Acre of Farmland in Iowa

• In the month of April, a total of 2,971.29 acres of land was sold in Iowa by auction
• The current average per acre price for land in Iowa according to April Auction sales is $11,829.21 per acre
• The highest selling farm in Iowa in the month of April sold on the 2nd in Clayton County for $9,410 per acre.
  • This farm was sold by the auction method for a total of $3,825,165 and was 406.5 acres of farmland which has a soil score rating of 50 CSR2 calculating to be $231/CSR point on a 81.6% tillable farm in Northeast Iowa.
• The highest dollars per acre farm in Iowa that sold in the month of April went to a 12.91 acre farm in Sioux County, IA which sold for $33,792 per acre on April 5th, 2024 by auction. 
• See full results from all 35 tracts of farmland that sold in table at end of the page.
• See how these averages compared to March and a year ago below in next section below to see trend line history.

Market Trends and Future Projections:

Each month we like discuss current trends in Iowa farmland sales, highlighting patterns, emerging opportunities, and potential challenges.

In 2023, farmland values in the upper Midwest reached record highs due to strong farm incomes from prior years and a limited supply of available land. Even with fluctuating crop yields caused by weather changes, high early crop prices maintained market stability, and increased real estate interest rates had little impact on land values. According to the Iowa State Land Value Survey, which uses sales data and expert insights, Iowa farmland averaged $11,835 per acre in 2023, exceeding the previous year’s record. Over seven years, these values have climbed by 65%, with the USDA highlighting significant increases across the upper Midwest, especially in Iowa, despite occasional droughts. All districts in Iowa saw rising land values except for a slight decline in the northwest, with the southeast district seeing the highest rise at 12.8% due to robust local demand. Active farmers, expanding their holdings, accounted for about 70% of the purchases, while real estate investors, including many retired farmers, made up 24%. The market’s strength was driven by high farm incomes, scarce land availability, and strong local demand.

Future Predictions for Farmland Values

Here you will gain insights into the future of Iowa’s farmland market with our expert forecasts. Understand what to expect in the coming months and years.

In the 2023 Iowa State Land Value Survey, participants shared their outlook on future farmland values over the next five years. Forty-eight percent anticipate a decrease in Iowa farmland values by the end of 2024, with most predicting a decline of 5% or less. Twenty-two percent foresee stability in farmland values over the next year, while 30% predict an increase by the end of 2024. Looking ahead, 70% of respondents anticipate land values to rise over the next five years, with many expecting an increase of 10-20%, while 30% believe values may either remain steady or decline in the coming years.

According to the Ag Economists’ Monthly Monitor, a survey of 70 ag economists from across the country, there is a projected major drop in net farm income this year for farmers. The economists surveyed forcasted net farm income to decrease to $117 billion in 2024, a figure notably lower than the USDA’s projection of $121.7 billion for the same period. However, given that this is an election year, certain economists speculate that a decline in net farm income might be alleviated by Congressional intervention. Additionally, some economists believe that the resilience of the U.S. balance sheet will also provide a buffer against the anticipated downturn. 

Given the anticipated decline in net farm income this year, the latest Ag Economists’ Monthly Monitor sought insights from economists regarding the potential repercussions for the agricultural economy in the coming years. According to one economist, while immediate consequences are expected to be relatively minimal, ongoing decreases in farm income beyond 2025 could exacerbate the situation. Potential impacts mentioned by economists include a slowdown in equipment sales, moderation of land values and rental rates, increased consolidation among farm service businesses, and adverse effects on financial ratios.

The anonymous survey revealed potential outcomes from a sharp drop in net farm income. One economist warned that those who considered 2021-2022 as a new norm for stable commodity prices might face overextension in the current downturn. Another highlighted potential significant losses for corn farmers this year. They noted that corn prices could dip below production costs for many, a situation not seen since the ethanol boom nearly two decades ago. Others expressed concerns about a slowdown in new equipment sales, a leveling off of land value growth, and deteriorating financial conditions for U.S. wheat producers. They also noted that farmers without significant cash reserves might face financial pressure, potentially leading to declining rental rates. Despite these challenges, economists anticipate strong farm balance sheets, continued demand for biofuels and new markets, decreasing input costs, and robust consumer demand, particularly for beef, with overall strength in other commodities.

Navigating the Selling Process:

Tips for Selling Your Farm in Iowa

Explore a set of practical tips for successfully selling your farmland by downloading our free eBooks here. Schedule a non obligatory consultation with us today and we will cover everything from when is the best time to sell, a customized marketing plan, sales methods, how we can help you find the right buyer, and answer your questions.

Farm Real Estate Experts in Iowa

Meet our team of Iowa farm real estate and auction experts who can provide you with valuable guidance and personalized assistance throughout the selling process. If you’re looking to uncover the true value of your Iowa farm or are considering selling, don’t hesitate to reach out to our experienced team. We’re here to provide you with a customized plan to meet your goals. Contact us today to get started.

Assessing Your Farm’s Worth:

Iowa Land Market Analysis Appraisal Technique

Curious what your farm could sell for? We prepare market analysis for each of our farmland sellers to help you discover and learn what your farm is worth from our market based research and expertise. Fill out our form here to request a market analysis of your Iowa farmland.

Recently Sold Land in Iowa Price Results