Land values continue climb
The value of farmland in Washington County has increased almost 15 percent in the past year. That is what the most recent Iowa Land Value Survey reported when it was released to the public Tuesday. While that may sound impressive, Washington County’s increase was tied with Keokuk County for the lowest percentage increase in the state.
Washington County’s farmland was estimated at $8,200 an acre as of November. It was estimated at $7,200 an acre in November of the prior year.
The state as a whole saw its farmland value increase nearly 24 percent to $8,300.
The Iowa Land Value Survey confirmed what has been true for a few years, which is that the farmland in northwest Iowa is more valuable than in southern Iowa. Nearly all the counties in the northwest quadrant have average land values over $10,000 an acre. Meanwhile, most of the counties in the bottom two rows of counties have values under $6,000.
Washington County’s values are actually fairly high compared to its neighbors. Only Johnson County has higher value farmland at $8,800 an acre. Iowa and Louisa counties are under $8,000, Keokuk and Henry counties are under $7,000 and Jefferson County is under $6,000.
Iowa State University economics professor and farm management economist Mike Duffy, who conducted the survey, said Washington County’s modest increase in land value can be attributed to its yield this year. He said the county had some quality land which produced well, but it also had plenty of low quality land which performed poorly and dragged down the average yield.
Duffy said the research farm near Crawfordsville was reporting a yield of 70 bushels of corn per acre, which was well below what other test plots in the state were reporting.
Duffy wrote in a press release that his survey shows a higher statewide increase than a couple of other land surveys conducted earlier this year.
For instance, the Chicago Federal Reserve Bank estimated an 18 percent increase in values from October 2011 to October 2012. The Iowa Chapter of Realtors Land Institute estimated the state’s values rose 7.7 percent from March to September.
Duffy attributed the differences among the surveys to their timing. His survey incorporated data from November, when it was clear that the crop yields would be higher than previously thought. He said there were also more land sales late in the year because of the proposed changes in property taxes.
Duffy added that the Iowa State survey samples different populations and uses different wording than other surveys, which could alter the results.
The county lucky enough to have the highest average land value is O’Brien County in northwest Iowa at $12,900. That county also won the honor of the highest increase in value at 35 percent. Osceola, Dickinson and Lyon counties, all in the northwest corner of the state, also increased in value about 35 percent.
“The 2012 land value survey covers one of the most remarkable years in Iowa land value history,” Duffy said. “This is the highest state value recorded by the survey, and the first time county averages have reached levels over $10,000. While this is an interesting time, there is considerable uncertainty surrounding future land values.”
Duffy said the rise in farmland values is highly correlated with farmers’ income. A steep increase in the price of corn and beans over the past seven years has been a boon to farmers.
In 2005, corn prices averaged $1.94 per bushel in Iowa. By November of this year they had more than tripled to $6.80. Soybean prices have more than doubled in that same span, from $5.54 a bushel in 2005 to $13.70 in 2012.
Higher input costs also accompany higher prices. However, input costs have not risen nearly as steeply as crop prices. Iowa State University estimated the cost of crop production to have risen 61 percent from 2005.