The average value of Iowa farmland is estimated to be $8,296 per acre, an increase of 23.7% from 2011, according to results of the Iowa Land Value Survey, released December 11. The statewide annual survey was conducted by Iowa State University Extension and Outreach in November. This is the third year in a row where values have increased more than 15%. The 2012 values are historical peaks.
Iowa State University economist Mike Duffy directs the widely-followed survey of real estate brokers and other selected individuals who are knowledgeable about farmland values in Iowa. Duffy, a professor of economics and an Extension farm management economist, released the results and explained the survey and shared his thoughts and opinions during a press conference December 11 at Ames.
Duffy notes that this survey shows a somewhat larger increase than some other recent surveys of farmland values for 2012 in Iowa. For example, the Chicago Federal Reserve Bank estimated an 18% increase in Iowa land values from October 2011 to October 2012 and the Iowa Chapter of the Realtors Land Institute estimated a 7.7% increase from March to September 2012.
Why does ISU survey show a higher increase in farmland values than other surveys?
"The difference in survey estimates could be due to values increasing more rapidly in the past few months than earlier in the year. Better than expected crop yields and the level of land sale activity due to the proposed changes in land related taxes contributed to the increasing values," says Duffy. "Our Iowa State survey samples different populations, and uses different wording than the other surveys. This could also lead to different results especially in times of uncertainty. Even within the Iowa State survey there was considerable variation in the estimates."
O'Brien County had an estimated $12,862 average value, the highest average county value. O'Brien County also had the highest percentage increase and highest dollar increase in value, 35.2% and $3,348, respectively. Osceola, Dickinson and Lyon counties also saw 35.2% increases. The Northwest Crop Reporting District, which includes all four counties, reported the highest land values at $12,890, an increase of $3,241 (33.6%) from 2011.
"The 2012 land value survey covers one of the most remarkable year