2013 Iowa Farmland Prices Survey is Out. Iowa Land is up 5.1%

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The 2013 Iowa Farmland Prices Survey from Iowa State University was released yesterday and we have begun the task of updating the county pages on our website to reflect the new numbers.

This years survey shows us about what we were expecting, a gain of 5.1% or $420 acres statewide.  That’s a positive for the land market.  There are still many strong factors influencing farmland prices, but they are competing with lower commodity prices and the lack of a Farm Bill this year.

I have attached all of the documents below, you can find information on each and every county and compare it with last year’s prices by whole dollar number or percentage increase or decrease from 2012.

This year is the first time we’ve seen decreases at least since 2009.  This year, mostly in northwest Iowa we are seeing individual counties as well as the NW crop reporting district with negative gains.

Northwest Iowa Crop District Average Price Per Acre $10,960 per acre, down 3.9%

North Central Iowa Crop District Average Price Per Acre $9,818, up 2.7%

Northeast Iowa Crop District Average Price Per Acre $9,449, up 2.5%

West Central Iowa Crop District Average Price Per Acre $9,449, up 2.5%

Central Iowa Crop District Average Price Per Acre $9,877 up 5.5%

East Central Iowa Crop District Average Price Per Acre $9,327 up 10.8%

Southwest Iowa Crop District Average Price Per Acre $7,531, up 7.4%

South Central Iowa Crop District Average Price Per Acre $4,791, up 11.2%

Southeast Iowa Crop District Average Price Per Acre $6,994 up 13.3%

Download the 2013 Iowa Farmland Prices Survey Reports

Prices for Iowa Farmland in 2013

2013 Iowa Land Values Survey Slideshow

You can click these images to make them larger iowa land prices 2013 farmland prices in Iowa Iowa farmland prices 2013 2013 farmland prices by crop district Farmland prices by Iowa county

Iowa Farmland Prices Falling Farmland Bubble?

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Iowa Farmland Prices Falling Farmland Bubble Predictors Get Their Day

A new report out this week by the Chicago Fed Reserve has some news that wasn’t unexpected.  With 6 years of record land prices behind us we knew an adjustment in values was in ahead.  The big question is how big will the adjustment be?  The prevailing figure I see being thrown around is 20% over the next 2-3 years.  For at least the last 4 years the term “Farmland Bubble” has been thrown around, as an Auctioneer I’ve had my share of arguments about what lies ahead.  I’ve always said “I don’t see a crash” and I still see no crash coming.  In fact last Thursday I conducted an auction in northern Iowa, with cash corn prices that day opening at $4.22 we still sold the farm for $10,000 per tillable acre.

Farmland bubble

The recent report by the Fed shows that Iowa as a whole state gained 9% appreciation in farmland prices from October 1, 2012 to October 1, 2013 which matches previous survey’s released but whats important to see is that the report shows from July 1, 2013 to October 1, 2013 we were running -1% appreciation.  Its easy to see the correlation between the July-August drop in commodities to the drop in farmland prices.  We can assume the current patter will prevail moving forward and we’ll begin losing value.  That value loss will not be equal and across the board which I’ll explain below.

Download the Chicago Fed Report here Iowa Farmland Prices

As an auctioneer and licensed real estate broker here are my current observations in the Iowa farmland market.

#1 There has been an increase in No-Sales around the state.  A No-Sale is when an auction does not achieve a sellers expected reserve price.  Our company has not experienced a no sale and with this threat out there its more important than ever to choose the right auctioneer, choosing the wrong one can turn into a disaster right now.

#2 Middle of the road and poor quality farmland is still selling but at a reduced price from where it was at last year.  If you have a low CSR and below you’ll see this reflected in the value of your farm.

#3 High quality farms are bringing a premium, this is the bright spot in the farmland market right now.  A report by the Iowa Realtors Land Institute recently quoted the figure of 10% premium for high quality farms in Iowa. Prices on high quality land with a high CSR is bringing top dollar still today, again if your auction is properly marketed and conducted you can still realize top of the market farmland prices.

Are you considering selling a farm in Iowa this season its important you give us a call at DreamDirt Farm & Ranch Real Estate to help you understand the value of your property and create a professional marketing plan that will help you achieve your farm’s full value.

To contact us call Toll Free (855)376-3478 or click fill out this farm Selling Farmland in Iowa

Jason Smith is the licensed real estate broker and principal auctioneer at DreamDirt Farm & Ranch Real Estate at 101 S. Noyes Street Mondamin, Iowa

Iowa Farmland Bubble: Jason on Brownfield Radio

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The Iowa Farmland Bubble, is it real or not real?  I’ve written about the Iowa Farmland Bubble and even use that name as if it exists several times in the past and last week I did an interview with Ken Anderson of Brownfield Ag News about the topic of Iowa farmland values.  The farmland news recently has been dominated by talk of the farmland bubble including a story that was run by the Des Moines Register and the CNBC written by Christopher Doering.  The Brownfield Radio piece is on their website today including the audio of my interview Experts disagree on farmland trends

I’m not sure we exactly disagree, because I do agree with Duffy, if corn falls to $4.50 we will see a reduction in farmland prices.  The commodities cycle could put us at $4.50 corn for parts of the year, but at the top of the demand cycle I don’t see $4.50 corn.  My opinion holds today that I do not see a break in the increase in value of farmland in 2013 and 2014.  Our trend has slowed at different periods of the year.  In early 2012 we saw gains slow, but in the end of the year they moved up at a blistering pace.  The same could be said about early 2013.  I believe we will continue to see these sporatic increases with a general pace forward for sometime, at least until something chages.  Thats the key, what will change and when will it change.  Will it be an increase in interest rates, a decrease in commodity prices, lack of invetor demand?  These things that prop the farmland market up have to change before the farmland market can slow or drop.  There are some things we can’t see or know today that could change the farmland market.  Probably the least predicatable is the 2013 crop, will it be a drought year or will it be a bumper crop?  If its a drought year it continues to prop up farmland prices, if its a bin buster and the market gets over supplied with corn it has the opposite effect, corn prices come down and farmland will follow.

Iowa farmland values

I continually read every piece of news I can find about farmland prices, taking the temperature of those involved in the market and its red hot right now.  Despite the tone of the article on the Des Moines Register and CNBC its red hot.  There are the contingent of folks that will say they are on the sideline, they are not in the market, they are standing at the bottom waiting to pick up the pieces… but those folks have been around since at least 2007 which was the first time I heard someone say that.  In 2009 Iowa’ saw about a 2% decline in farmland prices when commodity prices fell but in 2010 we began and ascent that we have never seen before.  Are there some nervous folks out there today?  You bet there are, on both the buying and selling side.  I know sellers that have held off for 3 years trying to time the market at its peak (they will likely disappoint themselves) and buyers that take extra caution in buying decisions.  Despite the headlines filled with big numbers there is great caution in place today.  Its not happening quite as willy nilly as it may seem if you just read the news.

There is always risk in investing in farmland and everybody should always do so with great caution but when you understand the real value of farmland and its scarcity you understand why prices are where they are today.  Finally, I am not an economist, I am a Iowa farmland auctioneer, my view of the market is from behind a microphone and a telephone.  I tend to judge the market more from a demand for land perspective weighed against the current and foreseeable farm business climate.  Decisions involving your money are always best made with advice of multiple professionals with different perspectives.