Iowa farmland values de­­creased 5% on average statewide during the past six months and 8.1% year over year as low commodity prices and a sluggish agricultural economy contribute to a “leveling off” of multiple year increases and a softening of the market.

A semiannual survey of land trends and values by the Realtors Land Institute (RLI) Iowa Chapter, released Sept. 20, reports that despite continued relatively strong demand for farmland, the market has become more “cautious” due to weakness in the commodity markets.

In particular, the last two months have seen a slight downturn in the number of land transactions and a decrease in prices paid for farmland, said Matt Vegter of Hertz Real Estate.

“It’s been a little bit of a wild ride the last six months,” he said.  “It’s still a good market but certainly a changing market.  It will be interesting see what happens the next six months.”

Land prices

The second consecutive land value decrease this year follows a flat 2023 market that leveled off double-digit increases through much of 2021 and 2022.

The average price of high-quality cropland in September was $13,808, down from $14,417 in March.  Medium-quality cropland averaged $10,638, while low-quality averaged $7,523.  South central Iowa saw the largest value decrease at 6% while north central saw the lowest decrease at 3.6%.

Pasture acres showed decreases as well, ranging from 1.9% to 4.2% across the state.  Timberland decreased 0.8% to 4.2%.

Survey respondents said they’re hopeful ample yields across much of Iowa this fall and the likeliness of lower interest rates on the horizon will help the land market stabilize.  Respondents expect the market to continue to be very neighbor-dependent, with sales in some areas staying firm and others continuing to soften.

Survey participants are farmland specialists and are asked for their opinions about the current status of the Iowa farmland market. Approximately 150 individuals provided information for this fall’s survey.