Iowa farmland value rises  20 percent in six months

The average value of an acre of Iowa farmland jumped 19.7 percent since September according to a survey completed by the Iowa Farm and Land Chapter No. 2 of the Realtors Land Institute.

According to The Des Moines Register, the survey shows the average value of all tillable cropland as of this month was $5,717 an acre.

That compares to $4,768 in September.

The value is up nearly 25 percent from March 2010.

In the southeast Iowa region, which includes Jefferson and Van Buren counties, the average change per acre from September to March was 21.1 percent.

All nine Iowa crop-reporting districts showed an increase in land value, ranging from a 15.9 percent increase in central Iowa to a 26 percent increase in the west central district.

Troy Louwagie of Hertz Farm Management in Mount Vernon, who heads up the survey team for the Realtors Land Institute, said the current percent gains are the highest six-month and 12-month increases ever reported by the Realtors Land Institute survey, which has been conducted since 1978. But, Louwagie pointed out, the annual Iowa Land Values Survey conducted by Iowa State University reported annual increases of more than 30 percent in 1973, 1974 and 1975, which are years prior to the start of the Realtors Land Institute survey.

Louwagie said several factors continued to drive up the value of Iowa farmland: strong commodity prices, favorable long-term interest rates, a limited amount of land offered for sale and a lack of alternative investments. He also said higher livestock prices, a view of land as a safe investment and fear of inflation as contributing factors.

The negative factors influencing the land market included: higher input costs, fear of a farmland bubble, tighter credit, continued uncertainty in the U.S. and world economy and high land prices.

The survey also found 70 percent to 80 percent of buyers were active or retired farmers, and that the demand for recreational land continued to be weak; recreational land is not selling well.

The Realtors? survey tracks with other surveys showing dramatic increases in farmland values boosted by big gains in prices for corn, hogs and cattle.

Information from The Associated Press was used in this article.