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.

August’s RMI for the state slumped to 44.2 from 49.5 in July. Iowa’s farmland price index for August improved to 53.4 from 47.2 in July. Iowa’s new hiring index for August rose to 51.6 from 47.3 in July. According to trade data from the International Trade Association, exports of agriculture goods and livestock for 2024 year-to-date were down by $12.6 million, or 1.4% from the same period in 2023.  

For more detailed information, visit the Creighton University Rural Mainstreet Economy page.

Families are keen to sell inherited land, even though the market is softer than in 2022 and 2023. High-quality farms are fetching strong prices, while mid to lower quality farms are seeing more cautious buyers. There’s been an increase in “No sales” in the first half of 2024, as sellers’ reserve prices are 10-20% higher than the highest bids. Understanding this gap is crucial for setting realistic reserve prices.

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 August, a total of 3621 acres of land was sold in Iowa by auction
• The current average per acre price for land in Iowa according to August Auction sales is $13,667 per acre
• The highest selling farm in Iowa in the month of August sold on the 22nd in Franklin County for $2,592,600.
  • This farm was sold by the auction method for $17,400 per acre and was 149 acres of farmland which has a soil score rating of 95.2 CSR2 calculating to be $183/CSR point.
• The highest dollars per acre farm in Iowa that sold in the month of August went to a 36 acre tillable farm in Chickasaw County which sold for $22,500 per acre on August 6th, 2024 by auction.
• See full results from all tracts of farmland that sold in table at end of the page.
• See how these averages compared to last month and a year ago below in next section below to see trend line history.

Why Now is the Time to Sell Your Farm: Market Trends Indicate Decline

If you’re considering selling your farm, now might be the best time to make a move. Recent market data indicates a downward trend in the rural economy and farmland prices, suggesting that waiting could lead to less favorable conditions for sellers. Here’s why acting now is a smart decision rather than waiting for the market to potentially worsen.

Rural Mainstreet Economy at a Low

According to the latest data from the Rural Mainstreet Index (RMI), the overall economy in rural areas has been on a steady decline. In August 2024, the RMI sank to its lowest point of the year, marking the 12th consecutive month it has remained below the growth-neutral threshold. This persistent decline signals challenges in the rural economy that could impact the value and demand for farmland moving forward.

Farmland Prices on the Decline

One of the most concerning indicators for farmland owners is the continued drop in farmland prices. In August 2024, farmland prices declined for the third time in the past four months. This downward trend suggests that the market is softening, and sellers may face decreasing land values if they choose to wait. By selling now, you can take advantage of current prices before they potentially fall further.

Weakening Farm Equipment Sales and Rising Delinquencies

In addition to declining farmland prices, the market for farm equipment sales has been sinking for the 13th straight month. This decline reflects a broader hesitation among farmers and investors to make large capital purchases, which could be a sign of increasing caution or financial strain in the industry.

Moreover, farm loan delinquency rates have risen by an average of 1.1% across the region over the past six months. This increase in delinquencies points to growing financial pressures on farmers, which could lead to more distressed sales and further downward pressure on land values.

Declining Agricultural Exports

Trade data from the International Trade Association reveals that regional exports of agricultural goods and livestock have decreased by $78.9 million, or 1.3%, year-to-date in 2024 compared to the same period in 2023. This drop in export demand not only affects farm profitability but also signals a broader market trend that could impact the long-term value of agricultural land.

Iowa’s Market Indicators: A Mixed Bag

Focusing on Iowa specifically, the August RMI for the state slumped to 44.2, down from 49.5 in July, indicating a contracting economy. While Iowa’s farmland price index for August showed a slight improvement, rising to 53.4 from 47.2 in July, the overall trend is one of instability and uncertainty.

Additionally, Iowa’s exports of agricultural goods and livestock are down by $12.6 million, or 1.4%, year-to-date in 2024 compared to the same period in 2023. This decrease in export revenue further underscores the challenging environment that farmers are currently facing.

Why Sell Now Rather Than Wait?

Given these market conditions, waiting to sell could result in lower land values and reduced demand. Here’s why now is an opportune moment to sell:

• Maximize Current Value: With farmland prices declining, selling now allows you to capitalize on the current market value before it potentially drops further.
• Avoid Market Saturation: As more farmers experience financial strain, there could be an influx of land hitting the market, increasing supply and potentially driving prices down further.
• Liquidity and Financial Security: Selling now provides you with liquidity and financial security in an uncertain market, allowing you to reinvest or diversify your assets more effectively.
• Take Advantage of Current Buyer Interest: Despite the downturn, there is still interest from buyers, including investors and neighboring farmers looking to expand. Acting now allows you to take advantage of this demand while it remains relatively strong.

Preparing to Sell in a Downturn

If you decide that now is the right time to sell, it’s crucial to position your property effectively to attract serious buyers. Here are a few tips:

• Choose the Right Sales Method: Consider using the auction method to generate competitive bidding and achieve top dollar for your farm. Auctions can expedite the sales process and create a sense of urgency among buyers.
• Professional Appraisal: Obtain a professional appraisal to set a realistic price based on current market conditions, helping you to make informed decisions and set expectations.
• Effective Marketing: Work with a real estate agent or auctioneer who has experience marketing farmland in a down market. A strategic marketing plan can help you reach the right audience and maximize your property’s exposure.

Conclusion

The current trends in the rural economy and farmland market indicate that we may be entering a period of decline. With falling farmland prices, weakening equipment sales, and rising loan delinquencies, waiting to sell your farm could mean facing a more challenging market in the future. By acting now, you can take advantage of current values and buyer interest, securing a sale before conditions potentially worsen.

If you’re ready to explore your options and learn more about how to position your farm for a successful sale, we’re here to help. Contact us today for a consultation and take the first step toward a secure financial future.

This blog provides a timely analysis of the current market conditions, emphasizing the potential risks of waiting to sell farmland. It encourages readers to act now to maximize their property’s value before the market potentially declines further.

Recently Sold Land in Iowa Price Results

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.