Land Prices as High as an Elephant’s Eye

Farmland prices in Iowa and elsewhere continue to impress.

In Iowa, less than two weeks after a piece of farm ground sold for $19,000 per acre, a new record sale was set. The selling price this time was $22,600 per acre for 80 acres of ground in Grundy County.

“The farm did have a wind turbine on it,” said Jim Rothermich of Iowa Appraisal and Research. “The buyer was an investor-buyer, and the runner-up was also an investor. So, the wind turbine income stream did help the purchase price reach that high, but most of that 80 acres, or the lion’s share, was all farmland.”

Rothermich, who tracks farmland sales and values in Iowa, says while the new state-wide record sale was eye-popping, it was only one of the county-wide record sales he has seen recently.

“Last week was just amazing,” he said. “I think there were five counties that set new price records last week. As a matter of fact, in Carroll County, which is in west-central Iowa, they set a record on Aug. 20 of $17,600 an acre and broke it just six days later with a sale of $18,300 an acre. That is how strong this market is, and it’s still moving up.”

Rothermich said farmland prices were high from 2012 to 2014, but he thinks sales in the state will exceed those price levels this fall.

Farmland values are also climbing in Illinois. The latest Chicago Federal Reserve Ag Credit Survey shows a 14 percent jump in farmland prices year over year during the second quarter, which marks the largest recorded increase since 2013.

The Illinois Society of Professional Farm Managers and Rural Appraisers conducted their own survey and found that during the first half of the year, farmland prices in the state rose by 20 percent. They say that’s happened in only four out of the last 51 years.

The Ag Economy Barometer, which surveys 400 farmers by phone each month, indicates that farmers remain bullish about farmland values.

Both the short-term and long-term Farmland Values Expectations Indices rose in August by four points. Although both indices are below their springtime peaks, they remain near their all-time highs since data collection began in 2015.

Sources: AgWeb, Purdue University/CME Group