Iowa farmland values dropped nearly 9 percent
DES MOINES (AP) – Farmland values across Iowa have dropped almost 9 percent over the past year, reflecting lower farm income and commodity prices, according to a farm real estate group’s report.
The Iowa Realtors Land Institute farmland survey through March found that the average value of cropland fell to $6,732 an acre, an 8.7 percent decline, in 2015.
“With lower commodity prices and lower revenue . we continue to see a softening of our market and downward pressure on land values,” said Kyle Hansen, a group leader and broker at Hertz Real Estate Services in Nevada
The state’s farmland values have seen a 22.5 percent decline since 2013, when values climbed to a record $8,690 an acre.
“That’s a reduction that will make a buyer flinch,” Hansen said.
For 2016, U.S. farm income is projected at $54.8 billion, 56 percent less than its high three years ago, according to U.S. Department of Agriculture data.
Iowa farm income has dropped 47 percent to $5.1 billion in 2014, the most recent data available, from $9.6 billion in 2011.
Corn and soybean prices have fallen 50 percent or more since reaching their peak in 2012. Cattle and hog producers also have seen their profits shrink, Hansen said.
“Farm incomes have been dropping, but land values haven’t dropped to the same degree,” said Steve Bruere, president of Peoples Co., a Clive brokerage and farm management business.
Many farmers have had to grapple with falling commodity prices and high input costs, like seed, land costs and fertilizers.
“Farmers have struggled for three years with declining profits, and land values will ultimately reflect that,” Bruere said.
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