Would you believe that single women own 10% of Iowa farmland? Those women, by the way, are 75 years old and older.
That's one of a number of interesting pieces of information Iowa State University Extension farm economist Mike Duffy discussed when he released results of ISU's annual Iowa Land Value Survey at a press conference Dec. 16 at Ames.
When asked about the number of older single women owning farmland in the state, Duffy commented, "You have to figure there will be a significant turnover of land in coming years to new owners. But beyond that I don't know what the implications are of that statistic," he said with a smile.
The 2% decline for 2009 is smaller than had been expected
The annual land value survey which Duffy coordinates showed a 2% average decline in statewide farm values in 2009, the first decline in a decade. The average value of an acre of farmland in Iowa as of Nov. 1, 2009 was $4,371, down $97 from the year before.
The annual Iowa Land Value Survey looks at land prices as of November and compares them to what the survey showed the previous November. Each November ISU surveys about 1,000 farm realtors, farmers, appraisers and others in the state who are knowledgeable about the current value of land in their county or area. Earlier in 2009 other surveys by realtors and lenders had shown a statewide average decrease in land values ranging from 4% to 7% for Iowa.
"Besides land values, we also ask other questions in the survey," says Duffy. Among these other bits of information gleaned from the November 2009 survey and topics which he talked about at the press conference were:
- Three-quarters of Iowa's farmland is owned debt-free.
- 72% of farmland buyers in 2009 were neighboring farmers and 23% were investors. But Duffy says most of those investors were other farmers or residents of Iowa cities.
- 4% of farm buyers were first-time, younger farmers.
- 21% of Iowa's farmland is now owned by someone who doesn't live in the state, compared with 6% of out-of-state ownership in 1982.
- 54% of Iowa's farmland is rented, a figure Duffy says is virtually unchanged from 1945.
Most sales of land are to neighbors, not outside investors
Although the realtors and others who participated in the survey reported a slight increase in outside, nonfarmer investors among land buyers for 2009, the majority of Iowa farmland continues to be bought by neighboring farmers.
In 2008, it was almost too easy to sell a farm. All you had to do was chat with your neighbor. But in 2009, with a tighter financial situation, 72% of sales were to existing farmers, primarily neighbors, the survey showed; 23% of the sales were to investors and 4% were to new farmers.
Duffy cautions that the investor category "is most likely people in Iowa who are familiar with farming and who want to add to their holdings. There isn't much evidence of three-piece suit, Wall Street types among the people who are investing in farmland in Iowa."
High-quality land is holding value, recreational land weak
The 2009 survey shows that high-quality land is holding value. Recreation land shows the most weakness. Recreation land generates relatively little crop income. "Comments from survey respondents indicate lenders haven't only tightened credit standards, but are also more concerned about the stability of off-farm jobs of prospective recreation land buyers," says Duffy.
In the survey 30% of the respondents listed high grain prices as a positive factor supporting land prices. And 42% listed declining grain prices as a negative factor. "That underscores how important farm earnings are to land values," he notes.
Overall land values are steady compared to earlier in 2009
Land values appear to have stopped falling. Surveys earlier in 2009, when grain prices were weaker, showed declines of 5% to 7% in general. Now, some indicators suggest values are starting to rise. Duffy doubts any major land move will occur without significant changes in the overall economic situation.
"The condition of the U.S. and world economies, the returns to livestock producers, interest rates, oil prices, the wars going on in Iraq and Afghanistan which the U.S. is heavily involved in, and a myriad of other factors could come into play with respect to the change in land values," he says. "The situation has stabilized now, but for how long is unknown. There is an awful lot of uncertainty."