Farmland

Iowa farmland prices up 17 percent

2013-03-31T21:00:00Z 2013-04-01T12:02:20Z Iowa farmland prices up 17 percentBy GEORGE C. FORD, george.ford@sourcemedia.net Waterloo Cedar Falls Courier

CEDAR RAPIDS, Iowa --- The value of an average acre of Iowa farmland rose 9.4 percent since last September to $8,690 per acre, according to a new survey by the Iowa chapter of the Realtors Land Institute.

On a year-over-year basis, an average acre of Iowa farmland rose 17.1 percent in value from March 1, 2012, to March 1 of this year.

The average price of tillable farmland on March 1 ranged from a low of $5,928 an acre in south central Iowa to $10,415 an acre in northwest Iowa.

Northeast Iowa recorded the largest percentage change in values over the last six months with a 12.6 percent increase.

High quality crop land is selling for an average $12,661 per acre in Northeast Iowa, up from $11,216 on Sept. 1.

Statewide, high quality farmland is averaging $11,515 per acre, up from $10,524 in September.

The land is classified by potential corn production.

The average price of an acre of "unimproved" Iowa farmland --- land con sidered tillable but with nothing planted on it --- has more than doubled from the $4,208 per acre average recorded in 2008.

Troy Louwagie of Hertz Farm Management in Mount Vernon attributed the continued rise in average farmland values to several factors, including strong commodity prices, low long-term interest rates and limited amount of land offered for sale.

"We had a lot of land sales late in the fall as people were concerned about the fiscal cliff and potential adverse tax changes," Louwagie said.

"After Congress acted in early January and the tax changes weren't as severe and, in some cases, were beneficial, we saw land sales pick up. In fact, we've seen some really strong sales over the last three months."

Congress retained the $5 million threshold in net worth before estate taxes are imposed, continuing favorable tax treatment for the sale of farmland.

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(1) Comments

  1. AEVBeach
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    AEVBeach - April 17, 2013 12:00 pm
    So a hundred acres of good Iowa farmland will cost you 800K and the yield per acre of corn is about 300/acre after costs; your return on investment is $30,000 or about 3 3/4% per year.
    I made 12.6% last year on a similar capital in my 401k. I think that looking after your investments quarterly is a bit easier than farming, isn't it?
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