July 28, 2017

Iowa Farmland Supply and Demand

It wasn’t long ago when more farms changed hands during a calendar year in Iowa than ever before. Low interest rates, record breaking commodity prices, and an uneasy stock market brewed the perfect storm for us to witness record breaking land transactions across all 99 counties in the Hawkeye State.

Things are much different out there today. There is a shortage of farmland for sale in the state of Iowa like most have never seen before. The land agents at Iowa Land Company are currently seeing a variety of variables that are impacting sellers to hold onto their farm during this particular land phase.  Currently, most farmers who were caught being too aggressive when times were good in 2011 and 2012 have already parted ways with their extra assets i.e., (equipment and farmland) due to the twist in grain prices. Most investors that have been selling land the past several years have come to a halt out of fear of not being able to replace their farm due to the lack of supply. Iowa Land Company is witnessing investors that bought high in ’11 and ’12 holding out on their investment for the long haul, as they don’t want to take a loss and hope to cash out in the green sometime in the future. Farmers that didn’t stick their necks out too far are the ones that are holding on by tooth and nail during tough times like we are currently in with commodity prices.

So is the time now when investors can cash out in the green when they bought at record high prices in 2011 and 2012? Unfortunately, Iowa Land Company doesn’t have the crystal ball, but what we can say for certain is there are definitely a lack of farms on the market today, especially high quality farmland. So with that being said, simple economics say when supply is low, demand is high. Iowa Land Company agents are certainly seeing a high demand for high quality farmland across the entire state of Iowa and can confidently say now is a great time to consider selling your farm. Most investors are not directly impacted by grain prices so they’re still anxiously waiting for more farms to come up for sale in the areas where they currently own land. Experienced farmers that have been around for a length of time are willing to buy still, especially if the farms quality and  location makes sense to them.

Iowa Land Company predicts land prices will stay strong through the summer and fall of 2017 due to the stabilizing crop prices, low interest rates, and limited supply. If you’re considering selling your farmland or would simply like to talk about what we are seeing in the farmland market in the state of Iowa, please feel free to reach out to one of our Iowa land agents today. There will to be a time where more supply becomes available to the market which will decrease demand. If the market becomes flooded with multiple farmland listings and several land auctions, along with low grain prices we believe land prices will take an additional dip. So, Iowa Land Company can say with certainty if you’re on the fence about selling, now and into the fall of 2017 is the time to sell. Give us a call, we are willing to fill you in on your market, give you a free farmland evaluation, and discuss what we provide to sellers that are looking to sell their land in Iowa.