Iowa Farmland Values 2020 Recap

Farmland values in Iowa 2019, going into the start of 2020, were down slightly in most regions of the state throughout year 2019 (2019 ISU Extension Survey) going into year 2020. Due to many pressures in the agricultural economy, the forecast in Iowa land values seemed to be on a bearish trend in the start of 2020. This was true and what we, at Iowa Land Company, were seeing based on sales and farmland buyer interest. For much of 2020, farmland values were continuing to remain in a bearish trend throughout the state. Farmers were consumed by the thought of the risk headed into the summer of 2020, due to lower than normal commodity prices. USDA reports were predicting good yields in most of the corn belt leaving commodity prices sweeping the floor. Many farmers would not profit or lose money farming corn and soybean crops in the state the way things were looking as fall harvest approached year 2020.  

Pressure Points Creating a Bearish Market in Farmland Values 2020

Low corn and soybean commodity prices, commodity trade wars, low commodity export demand for American agricultural goods made for great negative pressures on farmland values throughout the first 8-9 months of the 2020 Iowa farmland sales year. Covid-19 hit in early 2020 and the commodity bulls turned bearish. Livestock farms in Iowa started to experience buyer supply chains turn their backs and leave huge risk for the livestock grower. Uncertainty for the first 6 months in 2020 for the Iowa farming economy was at an all time high index! Covid-19 was a strong negative compound to what farmers would already be experiencing as a negative farming economy in Iowa. It had been almost a decade of treading through a bearish farming economy. Many farmers were losing sight of the profitable times from 2006-2012. When would this agricultural thing turn around?

Graph obtained from ISU 2020 Land Value Survey

The Turning Point in 2020 Farmland Values

From February through August in 2020, in our opinion, farmland values were at a 5 year low. The value for medium and low grade farmland was declining very rapidly due to all the pressures in the agricultural economy. Farmers were hesitant about buying farmland and investors were cautious about overpaying for farmland assets. The turning point from bearish to bullish began around the early September time period leading into the late fall months. Commodity prices bottomed in early August. Land values seemed to strengthen and the interest for farmland seemed to be more aggressive. Call volumes during the fall land sales months were very high. Investors that were sitting on the sidelines began to be active again in the farmland market. Farmers were seeing a rally in commodity prices and the stress was lifted for Iowa farmers. A forward commodity market for Iowa farmers was a surprise during harvest. Forward markets during harvest for commodities generally only happen once every 12-15 year average.

Forecasting 2021 Farmland Values

The forecast for farmland values seems to be up in the air for the future at this time. Farmland values, as of right now, seem to be trending upward due to the positive grain markets and low interest rates. Will this environment continue, is the loaded question. Stability in the farming economy is what most producers are looking for. If we see this farming economy for 24 months or more I think the farmland market could be bullish. The key will be how long these commodity markets sustain in the months or years to come. For more information about your farm’s value click the link (Whats My Farm Worth) and fill out a contact form and an Iowa Land Company land broker will be in contact with you soon.

2020 Farmland values Survey Iowa State Extension

The Iowa State Extension survey is a great year over year resource to provide the Iowa landowner a direction for the value of farmland in Iowa. It gives the Iowa landowner a good idea of land value trends for the year in Iowa from a broad overall vision and a specific county vision for land value trends for the year. We study and process the information, at Iowa Land Company, each year to better understand the land values in Iowa. As a landowner in Iowa, or a specific county, something to recognize is that every farm is different in specific counties in Iowa. At Iowa Land Company, we value each farm based on a few extremely local factors as to wherever the farm is located for our clients daily. To get a very detailed idea of what your farmland is valued today click (What’s My Farm Worth). A Iowa Land Company representative will be in contact with you shortly. 2020 Iowa State Extension Land Values Survey