Current Farmland Market In Iowa

By: Iowa Land Company

Current Farmland Market In Iowa

 

The first half of 2020 as everyone knows has been a whirlwind of events, not only for the overall economy but also the agricultural economy. This has affected US agricultural exports, along with every farmer in the state of Iowa both big and small. Whether the farmer grows livestock or grain, the coronavirus has hit the pocketbook of them all, resulting in a weaker farm income. Some have been more affected than others. How will this affect farmland values? We at Iowa Land Company are just now seeing signs of the effect. By the end of 2020, we will have a clear understanding on how the coronavirus has affected the farmland market in Iowa.

 

 

Farmland Sales Facts For The First Half Of 2020

 

The first half of 2020 we have seen slightly less farmland come to the open market. This, in return, is applying a squeeze on active farmland buyers in situations where they need to find farmland to purchase or face large tax consequences (1031 tax deferred exchange land buyers). In our opinion, we believe that things may be tight until the late summer and fall months. Farmland is a huge asset and the dust never clears for the demand of farmland. In the first half of 2020, we noticed an uptick of land buyers shifting out of the stock and equity markets into farmland. Most of these buyers prefer the slow-moving swings of farmland values. Our notions have been confirmed by Federal Reserve Bank reports based on the first quarter agricultural credit conditions survey. Although farmland assets can fluctuate in value, they generally move higher and lower over a period of time, unlike other assets and investments such as Dow Jones and S&P 500 Index. Overall, we are still completing farmland sales. We are facing a tight farmland market that will probably continue into the fall of 2020. Farmland investors have also been active rotating capital from other asset classes into farmland assets. Farmers are continuing to be active at land sales. They are more active during sales when high quality farmland is being offered for purchase.

 

 

 

 

How Are Current Farmland Values Being Affected In Iowa

 

In Iowa, farmland is classified as A, B, and C grade assets. Soil quality affects the class of farmland the most based on the location of the farmland in Iowa. Class A farmland is always the tightest farmland market class. When class A farmland is brought to the public market it is very highly demanded. Class A farmland in the first half of 2020 has held flat in value. Both B and C grade farmland assets have devalued slightly, roughly 1-3%. As the summer sales season in the fall begins to pick up, we will get a better idea on how the coronavirus pandemic has affected the overall farmland market in Iowa. In the history of farmland values, when negative agricultural economic pressure occurs class B and C farmland assets trend downward in values the most in this asset class. From 2018 to 2019, the Iowa Land Value Survey shows the statewide value of an acre increased by 2.3% and now, it’s likely back down to that 2018 number. Only time will tell if the price for an acre of farmland will drop even further in the latter half of 2020. Lower acre prices and weaker farm prices go hand in hand, but our team will work to sell your farm for top dollar.

 

 

Looking At The Future Of Farmland Values In The Last Half Of 2020

 

 

Land value trends will be more dependent on location of the farmland. Some volatility will be seen in markets where livestock and dairy production is more predominant due to the economic stance from the COVID-19 virus as processing production has slowed in these markets. Regions in where farmland is predominantly used for corn and soybean production, value trends will be attached to the class of farmland. Lower quality farmland will see a decrease in value. Higher quality farmland we think will flatten in value for the last half of 2020. Overall, land values compared to other asset classes have remained strong. Our hope is that the market will bounce back and be driven by a much stronger farm economy in 2021. For assistance to determine farmland values, contact Iowa Land Company and we will connect you to the representatives at Iowa Land Company that service the county your farmland is located in. You can call our main office to get in touch with your local Iowa land broker today at (515) 962-5048 or send us an email at info@iowalandcompany.com. We would be happy to answer any questions you might have!

 

 

 

 

 

 

 

Iowa Land Company is a full-service farmland auction company that services in all 99 counties of Iowa. We transact all types of land in Iowa. Want to know what your land in Iowa is worth ? Get a | Free Farmland Evaluation (Click) | from one of the trusted agents at Iowa Land Company.

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IOWA FARMLAND AUCTION COMPANY

Our company was built to generate Iowa land transactions combining two things, land marketing experience and farmland sales experience. Our marketing company and land salesman are focused on Iowa dirt! Iowa Land runs deep within each person that makes up our company. We have a  passion for land and that’s what we know. Each person has their strengths and we mesh those strengths together forming a land company that is powerful in both land auctions and private treaty land sales.

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Farm Location

Location can be the biggest variables when calculating land value so it’s important to not over look this step.
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CSR2 Value

Yes we certainly do consider your Corn Suitability Rating (CSR2) value when giving our traditional farm appraisal because it is very important.
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Improvements

We want to hear your story. How has the farm been taken care of? Who has farmed the farm? Etc…
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Current Market

We look at what is currently on the market, how long similar farms have been on the market, for what price and how that farm compares to yours.
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Recent Sales

We have access to our in farm sales report that we file per county. We keep a close eye on recent farms located near your farm.
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