DES MOINES (AP) — An annual survey showed Iowa’s farmland values continue to climb, increasing 5.1 percent from last year, but some real estate experts said those prices have already begun to fall.
The 2013 Iowa Land Value Survey found that farmland values rose to more than $8,700 an acre. It was the fourth year in a row that farmland values rose in the Iowa State University survey of nearly 500 real estate experts. Last year’s figure was nearly $8,300 an acre.
But Michael Duffy, an Iowa State agriculture economist who conducts the survey, said values were “in flux,” with most price increases in the first half of the year. Land values have weakened as corn and soybean prices dropped. Corn has declined from a high of about $8 a bushel to about $4 a bushel.
There also has been uncertainty about a proposed rollback in the mandate for corn-based ethanol, the possibility of rising interest rates and an inability in Congress to approve a new farm bill.
“It was a tale of two markets,” Chris Smith, a real estate agent with Hertz Farm Management in Nevada, told The Des Moines Register. “We lost ground in the second half of the year.”
Steve Bruere, president of Clive-based real estate firm Peoples Co., estimated current land prices could be 10 percent to 20 percent lower than last year’s values.
The 5.1 percent increase was much smaller than increases seen in recent years, when values grew by double-digits. The last time values dropped was in 2009, when they dipped by 2 percent.
“It’s more challenging to get the prices that we were seeing a year ago,” Bruere said.