By JOLENE STEVENS
The rainy, gloomy weather starting off the week did little to brighter Monday's land value survey report released in Ames.
The land figures, issued by the Center for Agricultural and Rural Development, Iowa State University and ISU Extension showed an average 3.9 percent decline in farmland values throughout Iowa's nine crop reporting areas.
Dr. Wendong Zhang, an assistant professor of economics at ISU, said while the decline was smaller than that a year ago, it marks the third time since 2009 that land values have fallen.
"The 3.9 (percent) decline may seem less than what many people expected," Zhang said. "I do not, however, see it out of line due to a mix of factors, including a lot of cash in hand for many farmers, market expectation of this decline early on, robust livestock returns and strong recreational demand.
"Despite decreasing once again, farmland values are still more than twice the reported values from 10 years ago and almost 14 percent higher than 2011."
The 2015 survey shows the value of all Iowa farmland declined. These include:
The most active factors influencing farmland values, Zhang said, include low interest rates and high yields as positive factors. Low commodity prices, high input prices and cash/credit availability are the primary negative factors.
Northwest Iowa was the lone district escaping the decline with a .73 percent increase.
The region's $9,685 per acreage figure compared to $9,615 during the comparable 2014 reporting period.
North Central land prices for 2015 showed the biggest drop, 6.73 percent with a figure of $7,962, compared with 2014's price of $8,546.
South Central Iowa had the next lowest decline, 1.73 percent, with the 2015 per-acre figure at $4,397, compared to the previous year's $4,475.
Elsewhere within the state, the figures in Central Iowa decreased from $9,087 to $8,505, or 6.4 percent, a year ago.
East Central Iowa land indicated a 5.57 percent decline with a 2015 per-acre value of $9,008, falling 5.57 percent to $8,506 for the reporting period.
Additional declines were listed in West Central, -4.32 percent, from $8,424 to $8,061; Northeast, -3.56, from $8,151 to $7,861; Southwest, -2.16, from $6,513 to $6,372; and Southeast, -4.47 percent, with the 2014 value of $7,215 falling to $6,892.
"Our forecasted farm income, slowing Chinese economy and potential interest rate increase would appear to indicate the farmland market has peaked for the foreseeable future," Zhang said. "It seems to continue to drift sideways to slightly lower.
"What I see is likely orderly adjustment opposed to a sudden bubble burst."
Zhang believes as market prices find new equilibrium, farmers will be able to weather the storm.
"Most farmers and land owners who bet on the high commodity prices lasting and aggressively expanding or borrowed heavily will, however, face significant problems in the months ahead."
The majority of survey respondents are predicting 2016's farmland values will decline again, but less than 0 percent, Zhang said. The decline will depend on location within the state with those strong in corn and soybean production.