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Slight dip seen in Tama County farmland values LOWER COMMODITY PRICES AGAIN CITED

January 17, 2019
By John Speer Central Iowa Press jspeer@tamatoledonews.com , Northern-Sun Print

Farmland prices are generally down slightly in Iowa and the midwest- the annual report from Iowa State University and surveys from Farmers National Company and Farm Credit Services of America all agree.

For Tama County farm ground, the ISU Land Survey shows an average value of $7,510 per acre in 2018, down two percent from 2017 $7,667 per acre and a drop of just over 16 percent from the all-time record of $9,145 in 2013.

Last year for Tama County ISU saw an average price of $7,667 per acre i compared to $7,455 in 2016, a hike of 2.8 percent.

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Surrounding Counties

For 2018, the values according to ISU Survey: Marshall County: 2018- $7,471 2017- $7,676; Grundy- 2018 - $8,708 2017-$8,816; Benton- 2018- $7,984 2017- $8,146 ; Poweshiek- 2018- $7,125 2017- $ $7,287; and Black Hawk-2018- $8,936 2017- $8,841.

Scott county continues to lead the state with an average value of $10,537 per acre, up from $10, 497 in 2017.

State

State-wide, the ISU survey showed a .2 percent drop from 2017 to 2018 average prices.

"Lower commodity prices, in part due to the recent trade disruptions, were cited as the most significant negative factor driving down land values," said Wendong Zhang, ISU extension economist who led the survey.

The lower commodity prices were also cited last year as a major factor in farmland values.

An ISU news release said, Zhang noted that despite the downturns, farmers don't need to worry about a sudden collapse of the US agricultural sector similar to the 1980s farm crisis.

"Limited land supply and strong demand by farmers still seems to hold up the land market," he said. "For five consecutive years, survey respondents have reported fewer sales than the year before, and the ag economy is still robust with 82 percent of the land in Iowa fully paid for," he said.

Farm Credit services of America reported a slightly different perspective: "Benchmark farmland values in Iowa, which generally is on the leading edge of changes in the real estate market, declined 1.4 percent in the last six months of 2018. For the year, farmland values were largely unchanged."

"Overall, agricultural land values have held up surprisingly well over the past few years despite lower commodity prices and much lower farm incomes compared to five years ago. There are a number of reasons for this, including the low supply of land for sale, cash rental rates remaining stronger than expected and interest rates that have been historically low,

a Farmers National Company press release said.

"The overriding question in the land market is about supply and demand. At this time, there are enough buyers at most sales to bid up the price to a good level for the seller. But as we move ahead over the coming months, will buyers become even more cautious than they are now while at the same time will we see more land come up for sale for various reasons? All of this is why those involved in the land market, from owner to lender, are holding their breath to see what comes over the next year," Randy Dickhut, senior vice president of real estate operations, said.

About the 2018 Farmland Value Survey from Iowa State University:

The survey was initiated in 1941 and is sponsored annually by Iowa State University. Only the state average and the district averages are based directly on ISU survey data. County estimates are derived using a procedure that combines ISU survey results with data from the U.S. Census of Agriculture. Since 2014, the survey has been conducted by the Center for Agricultural and Rural Development in the Department of Economics at Iowa State University and Iowa State University Extension and Outreach.

The survey is intended to provide information on general land value trends, geographical land price relationships, and factors influencing the Iowa land market. The survey is not intended to provide a direct estimate for any particular piece of property.

The survey is an expert opinion survey based on reports by licensed real estate brokers, farm managers, appraisers, agricultural lenders, county assessors, and selected individuals considered to be knowledgeable of land market conditions. Respondents were asked to report for more than one county if they were knowledgeable about the land markets. The 2018 ISU Land Value Survey is based on 793 usable county- level land value estimates provided by 624 agricultural professionals.

Of the 624 respondents, 62 percent completed the survey online. Online responses allow participants to provide estimates for up to 15 counties. A web portal has been developed to facilitate the visualization and analysis of Iowa farmland values by pooling data from ISU, USDA, Chicago Fed, and the Realtor Land Institute, as well as by making use of charts over time and interactive county maps. The portal can be accessed at www.card.iastate.edu/farmland.

 
 

 

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